FOR OFFICIAL USE ONLY Report FILE COPY

93
Document of The World Bank FOR OFFICIAL USE ONLY Report No. 2038a-IN FILE COPY INDIA STAFF PROJECT REPORT APPRAISAL OF THE HARYANA IRRIGATION PROJECT July 19, 1978 South Asia Projects Department Agriculture. C Division This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

Transcript of FOR OFFICIAL USE ONLY Report FILE COPY

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 2038a-IN

FILE COPY

INDIA

STAFF PROJECT REPORT

APPRAISAL OF THE

HARYANA IRRIGATION PROJECT

July 19, 1978

South Asia Projects DepartmentAgriculture. C Division

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

US$1.00 = Rupee (Rs 8.60) 1/

WEIGHTS AND MEASURES (METRIC SYSTEM)

1 meter (m) = 3.28 feet (ft)

1 kilometer (km) = 0.62 miles (mi)1 hectare (ha) 3 = 2.47 acres (ac)1 million cubic meters (Mm ) = 810 acre-feet (ac-ft)1 thousand million cubic

feet (TMC) = 28.32 Mm

1 cubic foot per second 3

(cusec) = 0.028 m /s1 ton = 1,000 kilograms (kg)

1 ton = 2,205 pounds

1 quintal = 100 kg

1/ Until September 24, 1975, the Rupee was officially valued at a fixedPound Sterling rate. Since then it has been fixed against a "basket"of currencies. As these currencies are floating, the US Dollar/Rupeeexchange rate is subject to change. Conversions in this report havebeen made at US$1.00 to Rs 8.60, which was the short-term averagerate prevailing at the time of Appraisal.

FOR OFFICIAL USE ONLYPRINCIPAL ABBREVIATIONS AND ACRONYMS USED

ARDC - Agricultural Refinance and Development Corporation

ATW - Augmentation Tubewell

CADA - Command Area Development Authority

CB - Commercial Bank

CCA - Cultivable Command Area

CGWB - Central Groundwater Board

DA - Department of Agriculture

GOI - Government of India

GOH - Government of Haryana

HAFED - Haryana State Cooperative Supply and Marketing Federation

HAU - Haryana Agricultural University

HSAMB - Haryana State Agricultural Marketing Board

HSMITC - Haryana State Minor Irrigation (Tubewells) Corporation

ID - Irrigation Department

ICB - International Competitive Bidding

LCB - Local Competitive Bidding

MEAD - Monitoring, Evaluation and Applied Development

O&M - Operation and Maintenance

PCS - Primary Cooperative Credit and Service Societies

PWD - Public Works Department

RMC - Regulated Market Committee

GLOSSARY

bajra - Pearl Millet

chak - watercourse command area

jowar - Sorghum

kharif - monsoon crop season; early May - early October

nukka - farm outlet from watercourse channel

panchayat - local authority

rabi - main irrigation season; late October to end

of April

sanctioned watercourse - legally sanctioned common channel in a

watercourse command

watercourse outlet - proportional module structure, joining a

minor canal or distributary to watercourse

channel

warabundi - operational procedure in the watercoursecommand where each cultivator takes the

whole stream of the watercourse in turn

(or "wara") with time proportional to CCA

of the farmers' holding.

FISCAL YEAR

Government of Haryana and Agencies - April 1 - March 31

ARDC and Cooperative Banks - July 1 - June 30

Commercial Blanks - January 1 - December 31

This documenl has a restricted distribution and may be used by recipients only in the performanceOf their official duties. Its contents may not otherwise be disclosed without World bank authorization.

INDIA

APPRAISAL OF THEHARYANA IRRIGATION PROJECT

Table of Contents

Page No.

I. BACKGROUND ............................................ 1Agriculture in India ............................. 1Irrigation in India .............................. 2Agriculture and Irrigation in Haryana .... ........ 2

II. THE PROJECT AREA ...................................... 4Introduction ..................................... 4Topography and Soils ............................. 4Climate .......................................... 5Irrigation Supply and Use ........................ 5Drainage and Flood Protection .................... 7Land Holdings and Land Tenure .................... 7Agricultural Development ......................... 8Jui Lift Irrigation Command Area ................. 8Marketing, Processing and Storage .... ............ 9Communications ................................... 10Agricultural Supporting Services ................. 10- Agricultural Inputs ........................... 10- Agricultural Credit ........................... 10- Agricultural Research ......................... 10- Agricultural Extension and Training .11Rural Services ................................... 11

III. THE PROJECT ........................................... 12Project Formulation .............................. 12Project Objectives ............................... 12- Irrigation Components ......................... 12- Associated Rural Infrastructure .... ........... 13- Project Areas ................................. 13- Project Monitoring ............................ 13Project Description - Summary .................... 13Project Description - Detailed Features ......... 14- Modernization of Canals . ..................... 14- Modernization of Watercourses .... ............. 16- Augmentation Tubewells ........................ 18- Jui Lift Irrigation Command ................... 18

This report is based on the findings of a Bank mission whichvisited India in December 1977 and comprised of Messrs. J. F. Cunninghamand P. Mcmal (Bank) and Messrs. P. Borrowman, W. M. Barber and P. Kotaiah(consultants).

4~~~~ ii -I-

Table of Contents (Cont'd)

Page No.

- Markets ....................................... 19- Village Link Roads ............................ 19- Village Water Supply .......................... 20

Project Implementation ........................... 21Summary of Costs ................................. 21Financing ........................................ 22Procurement ...................................... 22- Civil Works .................................... 22- Vehicles and Equipment ......................... 23Disbursements .................................... 24Accounts and Audits .............................. 24Environmental Effects of the Project .... ......... 24

IV. PROJECT ORGANIZATION .................................. 25General .......................................... 25Project Organization and Coordination .... ........ 25Project Management ............................... 25- The Irrigation Department ..................... 25- Haryana State Minor Irrigation (Tubewells)

Corporation ............................... 25- Haryana State Agricultural Marketing Board .... 27- The Bridges and Roads (B&R) and Public Health

(PH) Branches of PWD ......... . ..... I ......... 28- Command Area Development Authority .... ........ 28Agricultural Credit .............................. 29Operation and Maintenance ........................ 29Monitoring and Evaluation ........................ 30

V. AGRICULTURAL PRODUCTION AND INCOMES ................... 31Agricultural Impact .............................. 31- Expansion of the Irrigated Area .... ........... 31- Crop Yields and Production .................... 31- Marketing ..................................... 32

Financial Prices and Crop Budgets .... ............ 32Cost Recovery for Irrigation Works .... ........... 33- Present Level of Cost Recovery .... ............ 33- Farmer's Ability to Pay Water Charges ... ...... 33- Public Savings ................................ 34- Promoting Efficient Water Use .... ............. 34- Equity Considerations ......................... 34Repayment for Modernization of Watercourses ...... 35Cost Recovery for Village Water Supply ... ........ 35

VI. ECONOMIC ANALYSIS ..................................... 36General .......................................... 36Beneficiaries .................................... 37Basic Assumptions ................................ 37

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Table of Contents (Cont'd)

Page No.

Analysis of Irrigation Components .... ............ 37

- Modernization of Canals ..... .................. 37

- Modernization of Watercourses .... ............. 37

- Augmentation Tubewells ..... ................... 38

- Jui Lift Irrigation Command .... ............... 38

Construction of Markets ..... ..................... 38

Rural Roads ...................................... 39Rural Water Supply ............................... 39

Project Economic Rate of Return .... .............. 40

Uncertainty and Project Risks .... ................ 40

VII. AG3REEMENTS REACHED AND RECOMMENDATIONS .... ............ 41

LIST OF TABLES AND CHARTS

2.1 Climatological Data2.2 Seasonal Surface Irrigation Supply2.3 Approximate Annual Groundwater Recharge and Utilization in

Haryana (April 1976)2.4 Present Under Irrigation by Canal Commands2.5 Present Cropping Patterns and Yields by Canal Commands

3.1 Irrigation Components - Unit Costs3.2 Costs for Typical Market Yards3.3 Summary of Project Costs3.4 Financing Plan3.5 Estimated Schedule of Expenditures3.6 Proposed Allocation of Credit3.7 Estimated Schedule of Disbursements

5.1 Prices Used in Financial and Economic Analysis5.2a Kharif Season Crop Budgets (1987-88)5.2b Rabi Season Crop Budgets (1987-88)5.3 Total Costs, Recoveries and Cost Recovery Rates

5.4 Direct and Indirect Cost Recovery at Full Development5.5 Average Repayments and Farm Incomes (Jind District)

6.1 Economic Unit Capital Costs

C-i Implementation ScheduleC-2 Organizational Chart - Government of Haryana, Relevant Departments

C-3 Proposed Organizational Chart - Haryana State Minor Irrigation(Tubewells) Department

C-4 Organizational Chart - Haryana State Agricultural Marketing Board

Annex I - Related Documents and Data Available in the Project File

Annex 2 - Project Lending Terms and Conditions

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Table of Contents (Cont'd)

LIST OF MAPS

IBRD 13343 - Soils; Areas Suitable for Shallow and Deep Tubewell Development

IBRD 13344 - Total Annual Rainfall; Annual Rainfall Coefficient of VariationIBRD 13483 - Typical Lined Watercourse Command

IBRD 13481 - The Project Areas: Modernization of Watercourses, Market

Component and Jui Lift Irrigation Command

IBRD 13482 - The Project Areas: Modernization of Canal System, Village

Water Supply Schemes and Augmentation Tubewells

SUPPLEMENTARY DATA VOLUME

The following annexes are prepared in a Supplementary Data Volume (SDV) to

the Staff Appraisal Report which is available on request from the Projects

Division.

Annex 3 Modernization of CanalsAnnex 4 Modernization of WatercoursesAnnex 5 Augmentation TubewellsAnnex 6 Jui Lift Irrigation Command

Annex 7 MarketsAnnex 8 Village RoadsAnnex 9 Village Water SupplyAnnex 10 Project OrganizationAnnex 11 CreditAnnex 12 Prices, Crop Budgets and Irrigation Benefits

Annex 13 Economic Indicators - Irrigation Components

INDIA

HARYANA IRRIGATION PROJECT

STAFF APPRAISAL REPORT

I. BACKGROUND

1.01 Haryana, located in the northwestern part of India was formed in1966 when the State of Punjab was sub-divided. The State economy is predom-inantly agricultural and since 1966, it has been one of the fastest growingStates in India recording an economic growth rate of about 5.7% compared to3.6% for India as a whole. Over the same period, per capita income has risenby about 26% compared to 11% for the country and is presently about US$180.It has become a substantial exporter of foodgrains to other States. Thissuccess can be traced to a development strategy, which has emphasized in-crease in agricultural productivity through investments in irrigation andcomplementary rural infrastructure.

1.02 The proposed project would assist ongoing GOH programs of irrigationmodernization, rural roads, market infrastructure, and village water supplies.Project preparation was completed by GOH through the Project Preparation Groupin the Ministry of Agriculture and Irrigation, assisted by the FAO/World BankCooperative Program. A list of relevant reports by the State agencies andother related documentation is given in Annex 1.

Agriculture in India

1.03 India covers some 3.27 million km2 of which 49% is cultivable andabout 11% irrigated. India's population of about 620 M is growing at anannual rate of 2.0%. National income has grown at about 3.3% per annum since1950 and the per capita GNP reached US$150 in 1975. Although average percapita income has increased, in general there has been little change inliving standards of the vast masses of urban and rural poor which, conser-vatively measured, consist of some 250 M people with annual incomes belowthe poverty line of US$70 per capita. Accordingly, recent development plansof the Government of India (GOI) give enhanced priority to alleviating povertyand creating employment, especially in rural areas.

1.04 Agriculture is the dominant sector of the Indian economy and con-tributes about 45% of the GNP. It engages about 70% of the labor force andprovides the base for about 60% of India's exports. During the last decade,GOI's development plans have emphasized agriculture and sought to raisefoodgrain iproduction by increasing the use of fertilizers, plant protectionchemicals, and improved seed varieties. In support of this, GOI has modern-ized and expanded its agricultural credit institutions and accelerated thedevelopmenit of irrigation.

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1.05 Despite these endeavors and the impressive results of the green

revolution in such areas as the wheat growing Northwestern States (including

tiaryana), annual overall growth rate in foodgrain production over the last 15

years has been only about 2.3% or approximately equal to population growth.

Furthermore, India's agriculture remains heavily dependent on the vagaries of

the monsoon, and foodgrain production can vary as much as 20% from one year to

another. In order to reduce this dependence, further expansion of irrigation,

improvement of existing irrigation facilities and better water management are

necessary.

Irrigation in India

1.06 Up to 1964/65, irrigated area increased at a rate of only about

2.1% per year, of which approximately two-thirds was from surface water

resources and one-third from groundwater. Since then, the rate of increase

has about doubled, mainly through an accelerated program of groundwater devel-

opment. At present, the irrigated.area is 48 M ha, about three-fifths of

which is surface irrigated and two-fifths served by groundwater. The pace of

groundwater development has fallen off recently in the northwestern states

where the limit of groundwater resources is being approached. The focus of

the groundwater development program has now shifted to the eastern region

where untapped groundwater resources are plentiful. However, progress in

this region has been constrained by the weakness of agriculture supporting

services.

1.07 The pace of surface water development remained relatively constant

at about 0.5 M ha per year until the end of the Fourth Plan (1969/70-1973/74).

During this period, the physical plan targets set by GOI for a more rapid

development of surface irrigation were never fulfilled. A major problem has

been the thin spread of limited financial resources over too many projects

resulting in long construction periods for all projects and delayed benefits.

However, in recent years, budgetary allocations have grown rapidly and Indian

authorities have increased their efforts to complete ongoing projects. As a

result, the irrigation potential created in 1976/77 was 1.1 M ha or more than

twice that achieved in any single year before the start of the fifth plan in

1974/75.

1.08 Actual utilization in many completed irrigation projects, is sig-

nificantly less than the potential. Consequently, GOI and the State Govern-

ments emphasize "command area development" (CAD), which involves public in-

vestments in associated infrastructure (drainage, roads, markets, agricultural

extension and research) and private investments to improve water use efficiency

at the farm level (watercourse lining, field channels and drains, land shaping

and levelling).

Agriculture and Irrigation in Haryana

1.09 Haryana is one of the smallest States in India covering an area of

4.4 M ha of which 3.8 M ha is arable; of this about 2.1 M ha is irrigatedannually. The State has a population of 10.8 M (1974) with about 82% in the

rural sector; 65% of the population are engaged in agriculture. In 1966

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haryana was deficient in foodgrains but the period until 1972 b., substan-

tial increases both in cropped area and yield of principal crops. The period

1972 to 1975 was relatively unfavorable due to low rainfall but production in

1976/77 of about 5.3 M tons of foodgrain was an all-time record and more than

double the 1966/67 production of 2.0 M tons. The main foodgrains are wheat

(about 30% of the area), gram (26%), pearl millet (24%) and rice (7%). Statedomestic consumption is about 2.2 M tons, annually, and thus, Haryana has

become a major exporter to other States. In 1975/76 export of wheat, rice

and gram amounted to over 1.0 M tons with an equivalent amount in storage.

However, variable rainfall makes Haryana susceptible to droughts especially in

the dry southwest region. Major variations occur in wheat production because

of the unreliability of irrigation supplies. With the exhaustion of untapped

surface and groundwater resources, better use of available irrigation water

has become the main potential source of agricultural growth.

1.10 The State can be roughly divided into two tracts by the watershed

between the Ghaggar and Yamuna river basins which broadly defines the commands

of the Bhakra and West Yamuna Canals, the two major gravity canal systems in

the State (YLap 13482). The Bhakra Main Canal, completed in the early 1960s,

diverts water from the Sutlej River in the River Indus basin, traversing the

eastern corrLer of the State of Punjab before entering Haryana; the Narwana

branch of the Bhakra Canal provides a link to the West Yamuna Canal (WYC)

system. The WYC, constructed about 1820, diverts water from the YamunaRiver, the western-most tributary of the Ganges. A second diversion from the

Yamuna River, the Agra/Gurgaon Canal system, benefits a smaller area in the

southeastern corner of the State. The remaining major gravity canal still

to be completed is the Sutlej-Yamuna Link which will increase surface water

supply into the State by about 45% to supplement the existing WYC command area

and to a lesser extent the Bhakra and Gurgaon command areas. The main benefit

will be rabi water supply to the new lift irrigation areas of about 460,000 ha

currently under development in the southwest region of the State and served

by the WYC system. These areas include the Jui, Indira Ghandi, BNC and

Jawarhar La] Nehru schemes 1/ of which the completed Jui scheme represents

30,000 ha (Map 13482).

1.11 Tthe cultivable command area (CCA) served by canal systems and thenet area uncder irrigation in 1975/76 were approximately as follows:

Cainal System CCA (ha) Net area irrigated (ha)

Blhakra 1,166,000 916,000WYC 1,085,000 717,000Agra/Gurgaon 192,000 44,000

1.12 Groundwater development in Haryana has rapidly accelerated in

recent years particularly in the private sector. By 1976/77, about 225,000

shallow tubewells and 2,500 public tubewells had been sunk serving about

750,000 ha. Bank group support has been available for this development

1/ The Indira Ghandi and BNC schemes have been renamed Loharu and Sewari

schemes respectively.

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through the Haryana Agricultural Credit Project (Cr. 249-IN, US$25 million)which has been fully disbursed and also through the nationwide AgriculturalRefinance and Development Corporation (ARDC) Projects (Cr. 540-IN andCr. 715-IN). Present utilization of groundwater is estimated statewideat about 73% of average recharge, but in certain fresh groundwater areas,resources are fully committed. However, there still remains scope fordevelopment in marginal or saline areas providing groundwater can be dilutedwith surface supplies. Groundwater quantity and quality varies considerablythroughout the State. There is no legislation related to exploitation ofgroundwater but GOR recognizes that this will be essential for the controland equitable distribution of a limited resource.

II. THE PROJECT AREA

Introduction

2.01 In the north, Haryana is bounded by the Siwalik range (foothillsof the Himalayas) and to the east by the River Yamuna. The Aravalli range,which runs south of Delhi into the Bikaner desert forms the southwest boundary,whilst to the west, the River Ghaggar forms part of the boundary betweenPunjab and Haryana. Project works would be mainly concentrated in the westernhalf of the State where rainfall is low, soils are lighter and returns to theproposed investments most attractive.

Topography and Soils

2.02 The State lies between the Rivers Indus and Ganges and its soilsare almost entirely derived from alluvium. Nearly 70% of the State is a levelplain with elevations of less than 300 meters above mean sea level. About aquarter of the State in the southwest is undulating or rolling terrain withoccasional outcropping of hills. A continuous strip of desert adjoining

Rajasthan contains extensive sand dunes and covers some 8,000 km . In thesouth the plains gradually rise towards the Sohna plateau and the Aravallirange. Landslopes within the plain are gentle with natural drainage channelswhich are meandering and widely spread.

2.03 Semi-detailed surveys show wide variations in soil types which re-flect the varied physiography of the State (Map 13343). Soils of Haryanacan be grouped into five main types:

Sands and Loamy Sands of the plain in the southwestshow high to medium dune activity and cover the greaterpart of the lift irrigation areas. Soils contain limeconcretions in the sub-soil and are well drained but havelow moisture storage capacity; their nutrient status is low.

Sandy Loams and Loams of the central alluvial plan, aremoderately well drained but quite sticky and plastic when wet.They are low in nitrogen and zinc, low to medium in phosphateand high in potash.

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Silty Loams cover about 500,000 ha in the northern centralplains; they tend to be salt or alkaline affected to varyingdegrees which reflects lack of natural drainage and under-

irrigation. Subsoil texture is sandy loam to clay loam withdeteriorated structure. Reclamation of alkali-affected soilsis being undertaken through applications of gypsum and zincand by leaching.

Clayey Silts and Silty Clays occur in low-lying poorly drainedareas of Karnal and Kurukshetra districts. These soils are

very sticky and plastic when wet, and crack to a considerabledepth when dry. They are best suited to paddy cultivation.

Riverflood Plains of the Yamuna and Ghaggar Rivers have lightundifferentiated soils with sand to loamy sand texture inwhich saline and alkaline patches can occur. Soils of theSiwalik peneplain are loamy sands to sandy loams. They arewell drained but have only moderate moisture retainingcapacity and lie outside the main irrigated areas.

2.04 A soil survey shows that loamy sands and sands occur over 80% ofJui Canal Command area (Map 13841). These soils occur in a severely erodedphase on dune tops and in a moderately eroded phase on dune slopes, which havebeen stabilized and used for cultivation. Coarse loams occur in interdunaldepressions, and are calcareous in all parts of the profile. The moistureretaining capacity of these dune and sand soils is low to very low makingwater management difficult.

Climate

2.05 HLaryana has a sub-tropical monsoon climate characterized by wet,hot summers and cool, dry winters (Table 2.1). The kharif or monsoon seasonextends from late June to early October with about 80% annual rainfall occur-ing during this period, occasionally causing widespread flooding. The rabi orwinter season is cool, extending from mid-October to early April. Somecyclonic rainfall can occur from January to March varying from about 100 mm inthe northeast to about 50 mm in the southwest and is important for winter cropsespecially where irrigation supplies are scarce. The zaid or hot weatherseason lasts from mid-April to mid-June and is hot and dry with dessicatingwinds and occasional dust storms particularly in the southwestern regions.Rainfall is scanty and erratic varying annually from as little as 300 mm on

the borders of Rajasthan to over 1,100 mm in the Himalayan foothills in thenortheast. The coefficient of rainfall variation is over 40% in driest areasto less than 25% in the wettest (Map 13344). While temperatures seldom fall

below 0 C, ground frosts can occur especially on sandy soils but cause nominaldamage to cereals; more sensitive crops like potatoes and mustard can beaffected.

Irrigation Supply and Use

2.06 T'he Bhakra Canal System is supplied from the Indus River Basin.Diversions are based on the 1960 Indus Water Treaty between India and Pakistan

which allocated the Ravi, Beas and Sutlej tributaries of the River Indus toIndia. The water resources are shared among the northwestern States and aresubject to a number of inter-State agreements, none of which are in dispute.The supply is partly regulated by Bhakra dam 3on the River Sutlej. Annualallocations 1/ which averaged about 5,400 Mm during 1971-76 vary from yearto year, particularly in the rabi season (Table 2.2). The Yamuna River, theother main water resource, is snow and rain fed from the Himalayan foothills.It flows due south passiig close to New Delhi and has a mean annual watersupply of about 9,900 Mm . The two principal diversions from the Upper YamunaRiver are the Western and Eastern Yamuna canals serving Haryana and UttarPradesh respectively; both have intakes near Tajewela where the river emergesfrom the Siwalik Hills and now divert the whole river flow in rabi. YamunaRiver flows are unregulated but the Western Yamuna Command (WYC) benefitsfrom regulated diversions of the Sutlej and Beas Rivers by way of the Bhakra/Nawana Link canals (1,480 Mm annually). The amounts of watpr 2/ deliveredby the WYC system during 1971 to 1976 average about 3,700 Mm (Table 2.2).Once constructed, tVe Sutlej-Yamuna Link Canal (para 1.09) will provide anadditional 4 300 Mm annually to Haryana which is provisionally allocatedabout 140 Mm3 to the Bhakra Canal system, 1,620 Mm to the WYS system,420 Mm to the Agra Gurgaon system and the remaining 1,920 Mm to new liftirrigation systems served through the WYC system.

2.07 Statewide groundwater recharge is estimated at about 10,230 Mm3

(Table 2.3) but with considerable annual and seasonal variation. Groundwaterquality shows wide variation (Map 13344), and certain marginal and salineareas can only be developed by augmentation tubewells where discharge canbe diluted with surface supplies.

2.08 Table 2.2 shows that irrigated cropping intensity is presently loweven when supplemented by groundwater. Historically, main irrigation systemswere designed for cropping intensities of about 35% in kharif and 45% in rabi,essentially to provide "drought insurance" on as wide a scale as possible.A consequence has been for farmers to spread the surface water supply andsupplement this supply by private tubewell development wherever fresh ground-water was available. Water, rather than land is the constraining factor toincreased agricultural production. Accordingly, the farmers practice lightirrigation by conscious decision because this, in their experience, providesthe best returns per cubic meter of water. Table 2.4 compares net irrigationdeliveries at the field with nominal crop water requirements for presentcropping patterns. Bhakra canal command receives only 60% and 83% of nominalirrigation requirements in rabi and kharif respectively; WYC presently re-ceives about 46% in rabi but with completion of the Sutlej-Yamuna link, theratio of actual delivery to nominal irrigation requirement should rise toabout 62% or similar to that of Bhakra command.

2.09 It is concluded that the Bhakra and WYC command areas are substan-tially underirrigated. Any water saved through lining of canals and water-courses or provided from augmentation tubewells can be used effectively to

1/ Source: The Irrigation Department, GOH.

2/ Ibid.

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increase cropping intensity on existing farms in the command areas. This

would allow the expansion of the irrigated crop area within the command of

existing schemes. The resulting benefits would be substantial considering

the existing investments and given the presence within the area of innovative

and enterprising farmers.

Drainage arnd Flood Protection

2.10 Hlaryana divides approximately into two halves for drainage purposes;

the northwestern portion drains into the Ghaggar River system and the south-

eastern part into the Yamuna River. There are about 2,590 km of drainage

channels in Haryana and 350 km of flood embankment. Despite these works

about 6% ol the State remains subject to flooding after heavy rainfall,

particularl]y in the River Yamuna catchment. This surface flooding does not

occur in the main impact areas of the project. Requirements for field drain-

age in Bhakra and WYC commands vary with soil types, topography and cropping

pattern. P'roject irrigation components are generally located on lighter soils

with high infiltration rates and where drainage is not a serious problem.

Areas affected by drainage problems are well defined and deficiencies are

usually due to inadequacy of the main drainage systems. GOH is preparing

a master plan for drainage and flood protection works and intends to invest

about US$22 million in such works in the fiscal year 1978/79.

Land Holdings and Land Tenure

2.11 The 1971/72 census records that Haryana had 913,000 holdings of which

404,000 where less than 2 ha and 73,000 over 10 ha; about 55% were individual

holdings and 45% operated jointly by persons not of the same household. 81%

of holdings were owned and self-operated, 12% rented and 7% partly owned and

rented. Farms average 3.77 ha statewide with holding size distributed as

follows:

Bhakra Canal Command WYC CommandFrequency Cumulative Frequency Cumulative

Size Class Distribution Distribution Distribution Distribution

ha % of % of % of % of % of % of % of % of

Holdings Area Holdings Area Holdings Area Holdings Area

Below 0.5 10.5 0.7 10.5 0.7 14.4 1.1 14.4 1.1

0.5 - 1 10.5 1.7 21.0 2.4 13.5 2.7 27.9 3.8

1 - 2 17.5 5.5 38.5 7.9 19.4 7.8 47.3 11.6

2 - 3 13.1 7.0 51.6 14.9 13.3 9.1 60.6 20.7

3 - 4 9.8 7.3 61.4 22.2 9.6 9.3 70.2 30.0

4 - 5 7.6 7.4 69.0 29.6 7.0 8.7 77.2 38.7

5 - 10 19.4 29.7 88.4 59.3 16.0 31.3 93.2 70.0

10 - 20 9.3 27.2 97.7 86.5 5.9 21.8 99.1 91.8

Over 20 2.3 13.5 100.0 100.0 0.9 8.2 100.0 100.0

Total 100.0 100.0 100.0 100.0

Average sizeof holding 4.6 ha 3.6 ha

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Holdings in Bhakra command are larger than in WYC command as rainfall andsurface irrigation supplies are lower. The permissible land ceiling perhousehold is 7.25 ha for land (with assured irrigation) where the possibilityof double cropping exists and 10.9 ha on land capable of producing a singlecrop. Land consolidation has been completed for most gravity irrigated areasand is progressing in lift irrigated areas.

Agricultural Development

2.12 Haryana offers a wide variety of agricultural conditions due todifferences in rainfall, soil types and availability of groundwater. Presentcropping patterns and yields for Bhakra and WYC canal commands are given inTable 2.5. Excluding the southeastern part of the State (Gurgaon and Mahen-dragarh districts) which is outside the project area, three main agriculturalregions can be distinguished. The northern region of Ambala and northernparts of Kurukshetra and Karnal districts have limited surface irrigation butgood groundwater conditions except in the hills bordering Himachal Pradesh.Soils are suitable for paddy cultivation; rainfall is high and a typical croprotation is wheat-rice-fodder. Rice is usually tubewell irrigated. In someplaces potato is grown as a cash crop interspersed between paddy and wheat.Maize is also grown and toward the east, substantial areas are under sugarcane.By contrast, the southwest region of Hissar, Sirsa and Bhiwani districts haslow rainfall with high annual variations. Soils are very light and groundwaterpotential is poor because of salinity or low water table except along theGhaggar River. There is a substantial difference between rainfed and irrigatedagriculture. Under rainfed conditions and with traditional subsistence prac-tices, the typical crop rotation is bajra-gram; crop failures are common.Irrigation allows cultivation of wheat and cotton crops with cotton sown inApril/May and harvested in October/November; land is then commonly left fallowuntil the following rabi. Oilseeds are important but tend to be speculativebecause of price variations and vulnerability to frost. A third region liesbetween the two regions mentioned above and includes Jind, Rohtak, Sonepatdistricts and the southern parts of Karnal and Kurukshetra districts. Ithas lighter soils than in the north and annual rainfall varying from 450 to700 mm. Wheat is commonly planted together with more traditional crops suchas bajra, gram and fodder. In Rohtak district there are sizeable areas undersugarcane.

Jui Lift Irrigation Command Area

2.13 Jui canal which serves about 30,000 ha is an extension to the WYCsystem beyond the limits of its gravity command and is typical of about460,000 ha along the southern State border to be developed with lift irri-gation schemes (Map 13482). Before Jui Irrigation project was commissionedin 1973, low undependable rainfall limited agriculture largely to droughtresistant crops such as bajra, guar (cluster beans) and sarson (mustard).In years of low rainfall, such as 1974/75, complete crop failure could occur.Irrigated agriculture in Jui command has increased gradually from about 2,600ha in 1971/72 to some 7,600 ha in 1975/76. However, little effort has beenmade to promote suitable cropping patterns for the prevailing soil type andfarmers incorrectly follow farming practices currently used in the gravitycommand areas. Irrigation efficiency is very low. Present unreliability of

supplies in WYC command is an important constraint to consistent yieldsbecause of the low water retention capacity of soils in Jui command.

Furthermore, agricultural extension services are not adequately organized

which hinders change from traditional rainfed practices to more sophisticatedirrigated agriculture. In many cases, farmers also have to cope with serious

land development problems due to poor micro topography. An urgent need is to

develop suitable agronomic and water management techniques on the prevailing

soil types.

Marketing, Processing and Storage

2.14 Marketing of agricultural produce in Haryana has received enlight-

ened public support in line with GOH's efforts to develop a progressive,market oriented agriculture throughout the State. It is governed by the

Punjab 1/ Agricultural Produce Markets Act (1961) which empowers State control

over purchase, sale, storage and processing of agricultural produce. Regu-lated markets provide a meeting place for buyers and sellers with facilities

to handle large quantities of produce under a system that assures competition

among buyers and efficient handling and cleaning of produce. Control of each

market is exercised through one of the 86 Regulated Market Committees (RMC)

which include representatives of producers, licensed dealers and state offi-

cials. RMCs enforce the Act, provide market facilities and regulate theiroperations. RMCs are supervised and assisted by Haryana State AgriculturalMarketing Board (HSAMB). Recent substantial increases in marketable surplus

make further improvement to market facilities of special importance. Accord-ingly a major market construction program is being undertaken by HSAMB which

reviews new market proposals, regulates standards, supervises market construc-

tion and provides technical support. Major markets already completed and

under construction indicate the ability of HSAMB to meet high technical stan-dards and tight construction schedules. A marketing fee of 2% ad valoremon all market arrivals 2/ is collected statewide and has generated about $10.5

million in 1976/77. Some 35% of the marketing fee is being used for financingthe construction program, the operation and maintenance costs of existing

markets and debt servicing. The remaining 65% goes to the State Treasurywhere it is earmarked for construction of village link roads. Additionalrevenue is obtained from sale of plots and rental of drying platforms in new

markets and from HSMAB storage facilities. Processing facilities are providedby the private and cooperative sectors and are adequate for current and futureneeds. Storage requirements vary greatly depending on annual foodgrain produc-

tion. However, with an accelerating surplus position, storage has become short,

particularly for foodgrains. Existing storage capacity in the State has risenfrom 0.24 M tons in 1972 to 0.83 M tons in 1976 and is divided between theFood Corporation of India (FCI), primary co-operatives and agricultural credit

societies, HSAMB and Haryana State Warehousing Corporation. All organizations

1/ Legislation was enacted by the original State of Punjab before Haryanawas formed in 1966.

2/ GOH intends to raise the marketing fee to 3% ad valorem on all marketarrivals.

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are expanding their facilities. About 0.21 M tons of additional grain storagewill be constructed in Haryana under the Second Foodgrain Storage Projectfinanced by IDA (Cr. 747-IN).

Communications

2.15 Four main railway lines and four National highways, all radiatingout from Delhi, provide Haryana with good access to the rest of India andPakistan. National highways are fed by a network of State highways, districtroads and village roads with a total length of 15,520 km in April 1977. 8,650km of village roads have been constructed since 1970 serving 5,306 villagesbut leaving about 1,400 villages still to be connected by all weather roads.

Agricultural Supporting Services

2.16 Agricultural Inputs. Present use of inputs is one of the highestin India and is rapidly expanding with increased reliability of irrigation.Procurement and distribution are organized by Haryana State Cooperative Supplyand Marketing Federation (HAFED) through 57 primary marketing societies,regulated markets and a wide network of Primary Cooperative Credit and ServiceSocieties (PCS). Other outlets are private dealers who procure directly frommain commercial suppliers. Haryana Agricultural University (HAU) togetherwith the Agricultural Department are responsible for production of some foun-dation seed and all certified seed. With assistance from IDA through theNational Seed Project (Cr. 610-IN), the Haryana State Seed Development Corpo-ration was recently set up to organize production and distribution of certi-fied seeds to farmers. Existing services providing agricultural inputs tofarmers are likely to expand to meet the needs generated by the project.

2.17 Agricultural Credit. Agricultural credit in Haryana is providedfrom a variety of sources including 12 Cooperative Banks (CCB) serving 2,171primary outlets; 25 Land Development Banks and 27 Commercial Banks (CB) with279 rural branches. CCBs provide only short-term and medium-term credit; LDBsprovide only long-term credit (5 to 15 years) whilst CBs provide all threetypes of credit. At present, most credit comes from institutional sourceswith nearly 75% provided by the cooperative movement. The banking system inHaryana is well operated and managed. It is sufficient for project needs andcan cope with an expanding demand for seasonal credit.

2.18 Agricultural Research. Haryana Agricultural University is respon-sible for agricultural research throughout the State. The University iscentered at Hissar on one of the best experimental farms in India and coversabout 2,000 acres. Nine research sub-centers serve the main agriculturalregions but there is no center covering the requirements of dune soils in liftirrigation areas (para 2.13). Trials are carried out with all main crops,covering varieties, planting dates, plant population, fertilizer response andweed and pest control. A special program of soil and water management hasestablished optimal levels of water application; it is currently investigatingmethods of irrigation to increase water use efficiency including conjunctiveuse of saline groundwater with canal supplies. HAU also organizes threeimportant services under the Directorate of Extension Education. The FarmAdvisory Service operates in all districts through centers staffed with

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extension ard subject matter specialists; it organizes national demonstration

plots, field days, farmers' meetings and seminars, training camps, shows and

exhibitions. Each center provides intensive agricultural advice to five

villages through the Village Adoption Project (VAP). The Farm Information

and Communications Service provides farmers with publications, exhibitions,

audio-visual aids and maintains relations with the press. The Farm Training

Service conducts training in a wide range of subjects for departmental staff,

farmers and their families.

2.19 Agricultural Extension and Training. Haryana is divided into 90

blocks each staffed by about 5 graduate Agriculture Inspectors (AI), who

are employees of the Agricultural Department (AD), but work under the Block

Development and Panchayat Officer. Although not directly responsible to the

AD, the AIS execute State agriculture programs under overall direction of the

Director of Agriculture. Present staffing provide one AI to about 2,000

operational holdings (about 7,500 ha) with each Al supported by Village Level

Workers (VLW) from the Panchayat Department who spend a part of their time on

agric-lture extension. The AD also has various specialized field services such

as soil conservation, plant protection, marketing, agricultural engineering and

five Farmers' Training Centers under a centrally-sponsored scheme. All exten-

sion activities are coordinated with and strongly supported by HAU.

2.20 Training programs for agricultural staff are held in advance of each

cropping season and packages of practices are recommended. At block level, the

AI are responsible for mass farmer contact programs usually through meetings

held in each village once every fortnight. AIs also meet with VLWs every

second week and organize demonstration plots and field days. Although stand-

ards of agricultural extension and training are good compared to other States,

staffing is inadequate and there is room for improvement in work planning and

training programs (para 2.13). To remedy these deficiencies, the AD intends

to adopt the more intensive "T and V" system of extension supported by the

National Ext:ension Project now under consideration for IDA financing.

Rural Services

2.21 One of the important reasons for GOH's economic success has been its

allocation of substantial resources to rural services in order to make agricul-

ture more productive and rural life more attractive. Electrification has now

reached all villages and almost 80% have all-weather access roads. However

provision of village water supplies has lagged behind with only 14% (or about

920 villages) having schemes; works under construction or planned will supply

an additional 966 villages by 1983 bringing statewide coverage to about 32% of

all villages. Priority is given to those villages which qualify on the basis

of difficulty in obtaining a safe and secure supply as defined under GOI guide-

lines (para 6.13). Construction, operation and maintenance of all rural water

supplies is undertaken by the Public Health Branch of Public Works Department

(PWD). Following modifications in design criteria agreed with IDA, village

water supply schemes are of acceptable standards.

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III. THE PROJECT

Project Formulation

3.01 Review of the agriculture situation in Haryana by GOH's ProjectPreparation Group, assisted by the FAO/IBRD Cooperative Program, confirmedthat the major constraint to increase crop production in the State islimited irrigation supplies. Since the early 1970s, available surface waterresources have been fully developed or committed. Groundwater development hasbeen carried out aggressively by the private sector and, in many areas, isreaching the maximum sustainable yield. It thus emerges that further expan-sion of agricultural production can only be achieved by improved efficiencyand reliability of existing surface irrigation systems. Although Haryanahas made considerable strides in implementing a Statewide program of liningcanals and watercourse channels and in developing groundwater, there is aneed to accelerate these programs and increase their cost effectiveness byimproving planning and implementation standards.

3.02 During the next four years (1978-82), the proposed project wouldassist Haryana to complete the modernization of about 30% of its existingsurface water irrigation system, help develop supplemental groundwater andupgrade the development of the lift irrigation areas. It would also accel-erate construction of associated infrastructure such as rural roads, marketplaces and village water supplies. It would lead to about 290,000 ha ofadditional area being brought under irrigation on farms which are at presentunder-irrigated. The scope and scale of operations proposed under the projectare well within GOH's financial and construction capabilities.

Project Objectives

3.03 Irrigation Components. Canals require lining to reduce seepagelosses, simplify maintenance and assist in control of watertable in salinegroundwater areas; canal structures need to be modernized to improve operation.The program is particularly important in western Haryana where soils are lightand in the WYC command where many control structures use outdated technologyor have reached the end of their useful life span. Watercourses are theweakest link in the existing irrigation system. The watercourse distributeswater from the governmentally managed irrigation system through communallyowned field channels down to individually owned farm plots. From the early1970s, the historical assumption that watercourses were best left to the careof cultivators began to be questioned and GOH passed legislation to enforceaction considered to be in the best communal interests of watercourse share-holders. In line with these new objectives, the project would acceleratewatercourse modernization and enhance the design, monitoring and organizationof watercourse lining schemes with a view to decrease water losses and tominimize inequities in the distribution of water. Private development offresh groundwater has been one of the main factors of Haryana's agriculturalgrowth. However, the limits of fresh groundwater resources are being reachedand there remains substantial scope for public groundwater development in mar-ginal or saline areas where groundwater can be diluted with surface supplies.

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Accordingly, the project would finance augmentation tubewells in priorityareas to allow public use of groundwater storage. This would increase avail-ability and improve reliability of the surface water supplies and also facil-itate drainage. Haryana has an ambitious program to develop drought proneareas by lift irrigation and to help improve planning and implementationstandards. The project would assist with completion and commissioning of theJui Lift Irrigation Command. In this area, the project would finance minorirrigation and on-farm development works to facilitate efficient irrigatedagriculture.

3.04 Associated Rural Infrastructure. All-weather access to villagesis necessary to facilitate flow of modern inputs, extension advice and cropmarketing services in the project area and, most importantly, to facilitatethe transport of produce to the markets. In anticipation of the increasedagriculture production resulting from irrigation modernization, there isalso a need for additional rural markets. Finally, safe drinking water isnot always available in the project area and some of the available suppliesto village ponds may be prejudiced by the proposed canal and watercourselining program. Under the project, rural infrastructure within the projectarea (rural roads, rural markets and village water supply schemes) would befinanced.

3.05 Project Areas. The irrigation components are located in areas wherethe physical characteristics ensure greatest benefits to the various works;markets are selected where present facilities constitute a serious constraint;both the road and village water supply components continue on-going programs.

3.06 Project Monitoring. During implementation, designs will be reviewedon a continuous basis and improvements introduced where necessary. Uniformdesign standards for components financed from institutional credit would beemployed irrespective of the source of finance.

Project Description - Summary

3.07 The project would include:

(a) Modernization of canals: lining of about 23.2 millionsq m of canal wetted surface (equivalent to about2,900 km of branch canals, distributaries and minorcanals) and improvements to canal structures.

(b) Modernization of watercourses: lining of about 9.5million m (31 million ft) length of watercourse channelon about 2,100 watercourses serving some 250,000 ha.

(c) Augmentation tubewells: construction of about 325 deeptubewells (about 1.75 cusecs each) together with necessarylink channels to connect the wells to the surface watercanal systems.

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(d) Jui Lift Irrigation Command Area: construction andlining of about 0.55 million m (1.8 million ft.) lengthof watercourse channel on 132 watercourses serving some20,000 ha; land levelling of about 12,000 ha.

(e) Construction of 22 new and improvement of 4 producemarkets.

(f) Construction of 1,322 km of village link roads andprovision of hard shoulders for about 70 km of existingroads.

(g) Construction of 52 water supply schemes to serve

about 175 villages.

(h) Technical assistance to support project monitoring,evaluation, and construction of applied research anddevelopment works.

Project Description - Detailed Features

Modernization of Canals

3.08 Outside lift irrigation areas, the surface canal systems in Haryanaextend for about 8,910 km. The on-going program has lined about 815 km ofwhich 290 km were channels which had to be remodelled or enlarged. GOH nowplans to modernize branch, distributaries and minor canals throughout theBhakra and WYC command areas at an estimated cost of US$185 million (1977prices). The credit would partly finance about 2,900 km or 30% of thisprogram. The primary objective of the canal lining program is a reductionin seepage losses (para 6.06) estimated as follows:

Annual water saved Area to AnnualSoil Type Seepage Reduction per unit area of lining be lined Water Saving

cusecs/10 sq ft cu ft/100 sq ft 10 sq ft Mm3

Sandy Loam from 8 to 2 15,400 132 575Loam from 6 to 2 10,600 118 354

Seepage reduction occurs both while canals are flowing and during rotationalclosures when water remains standing in the canal below the level of irri-gation outlets. Objectives to be considered in selecting priority channels

to be lined will be: (i) elimination of waterlogging adjacent to canals;(ii) control of watertables in areas underlain by saline groundwater; (iii)increased canal capacities when existing earth channels are lined; and (iv)reduced maintenance needs and improved operating efficiency. Reduced main-tenance is of special importance in the Bhakra canal command where water sup-plies are relatively silt free and encourage heavy weed growth. Existingearth channels cannot be completely drained during canal closures so weedsproliferate.

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3.09 Detailed design criteria for modernization of canals have beenadopted by GOH. The type of lining to be used will depend on the capacity ofthe channel and the construction methods appropriate to the site. Mostchannels will have discharges below 200 cusecs and the two main alternativedesigns to be used are:

(a) a single 2" layer of baked clay tiles over a layer of 1:3cement-sand mortar placed on a binding layer over a com-pacted sub-grade. The 1:3 mortar layer is the seepagebarrier with the tiles providing the mechanical protec-tion; or

(b) a 1.5" layer of unreinforced concrete over slates("kattals") which are embedded in a 1:4 cement mortarlayer; this is placed on a lean sand-clay mortar base

over a compacted sub-grade. The concrete is the seepagebarrier; the slates provide weight and stiffness. Con-crete is placed in alternating 10 ft. wide panels.

Choice between alternatives (a) and (b) would depend on availability of mate-rials. Clay tiles are generally only attractive when sufficient quantitiesare needed within a reasonable haul distance to justify setting up a kiln.For canals with a discharge over about 2,000 cusecs, side slopes would beprovided with double tile lining on an interposed 1:3 cement-sand mortarseepage layer. The canal bed would be lined with a single tile layer beddedon a cement mortar base.

3.10 The practice in Haryana is to line existing canals rather thanconstruct new lined canals parallel to the original earth channel. Thework is carried out during rotational canal closures which can be extendedfor at least 16 days. The construction season runs from November to Mayproviding about 100 working days. Construction is labor intensive and betweenrotational closures, labor is used on an adjacent canal or to prepare tilesor slates for the next section to be lined. This method requires efficientorganization but obviates the need for expropriating land for a parallelcanal. Present performance shows that progress is about the same as con-structing a new parallel canal and is less costly.

3.11 Some canal structures have reached the end of their useful life;others are designed to standards which do not enable the degree of regulationrequired today for the efficient distribution of water. Concurrent with thelining programs, structures will be remodelled or replaced to improve opera-tional control.

3.12 Project costs have been based on single cl2y tile lining (para

3.09) and are estimated at about US$15.1 per 100 ft . Cost of canal modern-ization, including a percentage for modernizing st uctures, engineering andphysical contingencies is about US$23.4 per 100 ft (Table 3.1). Moderniza-tion of canals are described in detail in Annex 3 of the Supplementary DataVolume.

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Modernization of Watercourses

3.13 The watercourse is the link channel between the main canal systemoperated by the Irrigation Department and the farm channels of individualfarmers; the watercourse serves a command area or "chak" of about 250 ha andis farmed by about 60 cultivators. The "chak" is supplied by a single outletof about 1.5 to 2.0 cusecs (150 to 200 m 3/hr) designed to give a fixeddischarge; the supply is sufficient to provide full irrigation on about 30%of the watercourse command area. A typical watercourse (Map 13483) consistsof a stem channel with several branches which distribute water to farm outlets(or 'nukkas') of individual cultivators or occasionally to small groups ofcultivators. These channels are communal property of the chak cultivators(shareholders) who are jointly responsible for operating and maintaining thewatercourse system. This voluntary arrangement generally does not work welland watercourse systems are inefficient in distributing water supplies. Theproject is designed to improve on this situation.

3.14 The entire flow from the irrigation outlet is supplied to eachcultivator in turn on a time rotation or "warabundi" with the time of flowproportional to the cultivable command area (CCA) of each farmer; adjustmentsare made for the time required for water to reach the shareholders' farm. Thewarabundi defines by law the water right of the shareholder with respect toquantity and time of turn in a rotational cycle. The alignment of a water-course is also defined by law and once registered, the common channels withina chak are designated "sanctioned" watercourses. Warabundi with unlinedchannels in Northwest India has never worked adequately and does not enablean equitable distribution of water to all farmers because discharge from thewatercourse varies as the stream is rotated between the farmers.

3.15 There are about 8,300 watercourses in the gravity canal commandareas and GOH has estimated that about 6,420 watercourses are located wheresoils, topography or other physical features indicate that lining would beeconomically justified. The on-going program has partly lined about 1,200watercourses for about 55% of the channel length. The project would line anadditional 2,100 watercourses.

3.16 Lining of the watercourse reduces seepage and operational losses;the provision of a rigid channel section also facilitates the equitabledistribution of the water supply. Therefore, the benefits of lining water-courses are twofold. More water is available for irrigation and the supplybecomes more reliable and more equitable to all farmers in the chak. Variousobservations have been made on lined watercourses in Haryana and indicate thatthe overall annual effect of the lining operation is to increase the irrigatedarea in the chak by about 24% (para 6.07).

3.17 Following surveys executed with IDA and FAO/IBRD CP assistance,revised design criteria regarding the length of channel to be lined in eachwatercourse command have been adopted by GOH, as follows:

(a) The incremental production from the water saved by seepagereduction in the lined watercourse must justify the invest-ment in the lining.

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(b) No farmer in a watercourse command would have to convey

water for a distance in excess of 1,000 ft from the endof a lined watercourse to his farm gate.

(c) If necessary, the lining of any watercourse channel wouldbe extended beyond the limit fixed by item (b) above sothat all parts of a watercourse command can be served ina reliable manner. In particular, lining would be providedfor a watercourse channel where physical obstacles such asdepressions or sand dunes create a maintenance liabilitywith an unlined channel which cannot be reasonably overcomeby individual farmers.

(d) The cost of the lining would be within the repaymentcapacity of the farmers.

(e) After a watercourse is lined, the warabundi would berevised to compensate for the difference in time oftransmission of water between lined and unlined channels.

From experience gathered in ongoing watercourse lining programs, and researchstudies, lining of about 75% of the length of watercourse channel for typicalchaks included in the project would meet the above criteria. However, a lowerpercentage may be justified in certain cases and where site conditions neces-sitate or if farmers so request, the whole length of the watercourse would belined. An assurance has been obtained from GOH that for the modernization ofwatercourses component, a design manual suitable for use by field staff respon-sible for design and implementation of the works in the watercourse commandwould be prepared and submitted by December 31, 1978 to IDA for review basedon the guiding principles outlined above. GOH has also made arrangements thata suitable training program would be carried out to ensure that field staffunderstand the procedures and design principles recorded in the manual.

3.18 The design of lining depends on the availability of building mate-rials and on the need for labor intensive construction methods. The typicalchannel section would have vertical walls made of brick masonry on a concreteslab over a sub-grade of broken slate pieces; this simple, effective design

reduces seepage losses to about 6 cusecs per million ft of wetted perimeter.Permanent farm outlets (or "nukkas") would be provided with gates on bothlined and unlined portions of a watercourse. Permanent crossings overthe watercourses would be constructed to permit access by bullock cart ortractor to each holding.

3.19 The cost of watercourse lining is estimated about US$1.86 per footlined inclusive of minor structures (Table 3.1), engineering and physicalcontingencies. Field testing of various types of lining would continuethrough the project period and specifications could be modified if improve-ments can be introduced. Modernization of watercourses are described indetail in Annex 4 of the Supplementary Data Volume.

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Augmentation Tubewells

3.20 There are about 1,100 existing augmentation tubewells (ATWs) inHaryana and GOH has identified five areas (Map 13482) where groundwaterquality and availability would support an additional 650 ATWs capable ofproviding about 450 Mm annually. The project would construct a first phaseprogram of 325 ATWs over a four year period with the remaining 325 ATWs phasedover an extended period after project completion. This would enable furtherinvestigations to be completed to establish the relative needs of privateand public tubewell development particularly in parts of the five selectedareas where groundwater can be used for direct irrigation.

3.21 ATWs will be constructed in groups to reduce the cost of theelectric power supply and to make discharge operationally significant whenused conjunctively with the surface water canal system. The wells would

J ~~~~~~~~~~~~~~~~~~~3average about 135 m depth with discharges of about 150-200 m /hr. ATWs wouldbe spaced generally in a single row at 600 to 1000 m intervals along a linedcollection channel discharging into the surface water irrigation network.Design parameters such as screen length, choice of screen material and pumpunits have been selected to give minimum cost to the water produced. Capaci-tors and other necessary safety equipment would be provided at each ATW to avoiddamage to the units due to power outages or variations in voltage. HaryanaState Electricity Board (HSEB) will construct 11 kV lines to power each groupof ATWs under the project; separate lines would be provided which exclusivelyserve.ATWs so that power interruptions can be minimized.

3.22 The cost of each ATW in the project program is about US$33,450including engineering and physical contingencies (Table 3.1) the cost ofelectrification is about US$12,400 per well including physical contingencies.

Jui Lift Irrigation Command

3.23 The component would continue development of Jui Command Lift Irriga-tion area (Map 13481) through construction and lining of about 132 watercoursesand land levelling of about 12,000 ha. Because of the light soils, the wholelength of each watercourse would be lined to serve all farm outlets commandingabout 5 ha. A condition of disbursement for Jui Command would be that thedesign of each of the first 10 watercourses would be reviewed and approved bythe Association before implementation of such watercourses. Design of liningsection would be as described in para 3.17 except for about 10 watercourseswhich would be experimental; for these, design criteria and constructionmethods would be tested to establish the most suitable water conveyancesystems for typical soils and topography in lift irrigation areas. GOH wouldbear any extra cost for experimental watercourses incurred over and above theunit costs of comparable works constructed with conventional brick lining(para 3.18). Such applied research and development costs would be supportedby the project.

3.24 The cost of watercourse lining including contingencies would beabout US$1.86 per foot run. An additional physical contingency of 20% hasbeen included for the 10 experimental watercourses to enable small scale andnovel technologies to be tried.

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3.25 Land shaping of some 40% of a holding is adequate for efficient

use of water allocation because of the low irrigated cropping intensity in

Jui Command. Suitable land for the area to be levelled can generally be

found in the flatter inter-dune areas thus enabling construction to be done

with light agricultural equipment. These areas are easier to manage with

irrigation and tend to have better water retention capacity. Land levelling

and associated on-farm development would be concurrent with the watercourse

construction program.

3.26 The cost of land levelling would vary widely depending on microto-pography, soil types and area of a holding to be levelled. Work undertaken on

an individual. holding would be geared to the capacity of the farmer to repay.

For estimating purposes, unit costs are taken as about 1,100 Rs/ha and it is

assumed that land levelling would cover about 40% of the CCA of a holding.

Markets

3.27 Under the project, 22 new markets would be constructed and 4 exist-

ing markets improved (Map 13481). New markets fall into four categories:

Area ofCategory Market Yard Estimated Cost No. in Project

(acres) (Rs million) (US$ million)

A 50-100 26.4 3.06 1

B 35-50 12.5 1.45 5

C 25-35 6.8 0.80 15

D 15-25 3.5 0.40 1

3.28 The facilities and costs of typical market categories are listed in

Table 3.2. Market design is prepared by HSAMB and considers movement within

the market yard for truck and bullock transport; it also provides facilities

for expeditious transactions, reduction in transit and storage losses through

better handling, short-term storage and grading control. Producers would

benefit as they can display their produce and sell by tender. All markets

provide improved hygienic facilities including drinking water supply and sewer-

age, lighting and facilities and services for animals. Proposed market loca-tions consider local access, land availability for future expansion and asso-

ciated development of storage and processing industries. It would be a

condition of disbursement for cost of the first five produce markets that

HSMAB would submit to IDA and ARDC for approval before implementation, theplanning, design and financial analysis of the first five market schemes to beconstructed usnder the project.

3.29 HSAMB provides support to local Market Committees (RMC) which are

directly responsible for markets; HSAMB organizes and supervises construction

partly on forced account and partly through small contractors with materials

supplied by the Board. Completed works are of high technical standard.

Village Link Roads

3.30 All-weather access to villages is essential given the monsoon cli-mate, the expanding surplus agricultural production and need for an increase

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in agricultural inputs. The project would connect 950 villages to the exist-ing all weather road network throughout the State by constructing villageroads totalling 945 km. It would also improve existing roads totalling 377 kmto all-weather standards, and provide hard shoulders for 70 km of roads. Theroad and track network in Haryana is laid out in a series of intersecting starpatterns centered on towns and villages which are the focal point of all ruralactivities and follow existing track alignments. Completion of existing roadsfor which earthworks and some structures have been completed would be givenpriority. All project roads would be designed and built to India Road Congress(IRC) standards and Haryana PWD specifications for village roads which aresatisfactory. Right of way, formation and pavement widths would be 12.19 m,7.32 m and 3.66 m respectively; embankment height would normally be about0.9 m with drainage as required. The rather narrow right of way is sufficientbecause farmers will allow the Roads and Bridges Branch of PWD to take soilfrom their fields in preference to giving up more land for borrow pits.Pavements would be designed using a minimum thickness of 17.5 cm and would beconstructed of stone or brick soling and waterbound macadam surfacing sealedwith bituminous premix carpet. Provision is made for hard shoulders wheresoft shoulders are not suitable because of soil conditions of road elevation.

3.31 The average unit cost for new village roads including physicalcontingency is about US$14,530/km; road improvement works average aboutUS$11,050/km; cost of providing hard shoulders are estimated at US$1,975/km.

Village Water Supply

3.32 The project would include 52 water supply schemes to serve 175villages with a present population (1977) of about 313,000. The schemeshave been selected by the State Sanitary Board (SSB) on the basis of greatestneed and are spread through seven districts (Map 13482). Surface irrigationcanals will be the source for 42 schemes and the 10 remaining schemes will besupplied from tubewells.

3.33 Originally, GOI guidelines recommended that water requirements bebased on a consumption of 68 liters per capita per day (lcd). However, giventhe large Statewide program of schemes to be undertaken, possible variationsin population trends and the limited budgetary resources available, GOH hasnow decided--and the Association concurs--to retain a figure of 45 lcd fordesign purposes and also to adopt a number of cost saving features. To ensureequitable distribution of scarce resources, private water connections are notproposed at present. Canal-fed schemes would have storage/sedimentationbasins with capacity for a 12 days supply to meet periods of canal closure,and a feeder channel able to fill storage in 7 days. Raw water would betreated by slow sand filtration and chlorination. Treated water would bepumped either directly into the supply system or stored in elevated reservoirs.Chlorination is the only treatment provided for tubewell schemes. Both canaland tubewell based schemes would have gravity fed mains designed to supplyvillage populations through standpipes each serving 200/300 consumers. Pumpswould be electrically powered from the State rural distribution grid; standbydiesel pumps/generators are provided to ensure against electrical outages.

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As a condition of disbursement for the village water supply component, thePublic Health Branch of PWD of GOH would prepare for IDA approval detaileddesigns of the first five schemes to be constructed under the project.

3.34 A sample scheme in each district has been fully designed to esti-mate costs. The unit rate per capita including contingencies based on theprojected population in year 2007 and the design standards and criteria out-lined above would be about US$16.0 for tubewell supplied schemes and in therange of US$19.0 to 24.0 for canal-fed schemes. Unit costs vary dependingon location, population density and number of villages served by a waterworks.

Project Implementation

3.35 The implementation schedule given in Chart C-1 aims at projectcompletion by August 1982. The main construction season is from Septemberto April although certain activities such as works on market construction andon rural wat:er supply continue through the monsoon season. All constructionwork would be labor-intensive with about 35% of project cost spent on labor.Machines would be used to achieve standards of compaction for road pavements,for concrete mixing and transportation. All components have establishedconstructioni techniques which are cost effective and relate to local condi-tions. Most: works are suited for small labor contracts and sufficient laborcontractors are available to ensure progress and good quality work.

Summary of Costs

3.36 Based on December 1977 unit prices, the total project cost net oftaxes and duties is estimated at US$222.0 million as summarized below anddetailed in Table 3.3.

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% ofNo. Component Local Foreign Total Local Foreign Total Base Cost

-- (Rs million) --- --- (US$ million)--

1. Modernizationof Canals 369.9 61.1 431.0 43.0 7.1 50.1 28.2

2. Modernization ofWatercourses 364.1 47.3 411.4 42.4 5.5 47.9 27.0

3. AugmentationTubewells 83.7 24.6 108.3 9.7 2.8 12.5 7.1

4. Jui Command(a) Construction

of Water-courses 22.2 2.5 24.7 2.6 0.3 2.9 1.6

(b) LandLevelling 6.4 1.6 8.0 0.7 0.2 0.9 0.5

5. Markets 144.1 30.1 174.2 16.7 3.5 20.2 11.46. Village Link

Roads 120.7 25.8 146.5 14.1 3.0 17.1 9.67. Village Water

Supply 58.3 12.9 71.2 6.7 1.5 8.2 4.68. Technical

Assistance andApplied Researchand Development 3.0 - 3.0 0.4 - 0.4 0.2Total 1 - 8 1,172.4 205.9 1,378.3 136.3 23.9 160.2 90.2

Engineering &Supervision 147.9 - 147.9 17.3 - 17.3 9.8Base Cost 1,320.3 205.9 1,526.2 153.6 23.9 177.5 100.0PhysicalContingencies 99.5 13.8 113.3 11.6 1.6 13.2 7.4

Price Escalation 234.2 35.3 269.5 27.1 4.2 31.3 17.6

TOTAL 1,654.1 255.0 1,909.1 192.3 29.7 222.0 125.0

The foreign exchange component is estimated at about US$29.7 million or 13%of the project cost. Costs are based on existing unit rates from on-goingprograms. Physical contingencies for the main components vary from 5% forthe modernization of canals to 15% for village water supply. Cost of con-struction equipment is included in the unit rate for civil works. Theestimated cost of technical assistance is based on prevailing GOh rates ofabout US$770 per month for local consultants including fees and subsistenceallowances.

Financing

3.37 The proposed credit of US$111.0 million would finance 50% of theproject cost net of taxes and duties. Modernization of watercourses, markets,augmentation tubewells and Jui Command components are partly financed throughinstitutional credit; modernization of canals, village roads and water supplywould be financed by GOH from its development budget which includes a GOIcontribution (Table 3.4).

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3.38 The credit would be made to GOI. Assurances have been obtainedfrom GOI that: (i) the proceeds of the credit except disbursements for workspartly financed through institutional credit, would be channeled to GOH onGOI's standard terms and arrangements for development assistance to the States,and (ii) disbursements for institutional credit items (US$41.4 million) wouldbe made available to ARDC. A further assurance has been obtained from GOIand GOH that GOH would include in its annual budgetary proposals sufficientfunds 1/ to execute the project substantially in accordance with the implemen-tation and expenditure schedules for the four-year project period. GOH wouldguarantee debt repayment for components partly financed by institutional creditwhich would be on terms and conditions detailed in Annex 2. A condition ofeffectiveness of the Project would be that: (i) the financial arrangementsbetween GOI and ARDC have been made; and (ii) the Association has receiveda banking plan satisfactory to the Association giving details of refinancingof loans by the Lending Banks through ARDC.

Procurement

3.39 Civil Works (US$156.3 M). 2/ Civil Works would be restrictedto seasonal construction and would generally be carried out through labor-intensive methods. Works would be relatively small and scattered throughthe State. Consequently it would neither be feasible nor economic to groupthem into large contracts for international competitive bidding (ICB). Thepresent practice of GOH is to award construction works of the type includedin the project after local competitive bidding (LCB) and this practice wouldbe followed for the proposed credit. This procedure would be acceptable tothe Associat:ion. Haryana and the neighboring States have a well developedconstructioni industry and the procedures for LCB are satisfactory. Moderni-zation of watercourses and some small canals have to be implemented on acommand area basis over a limited period of time to minimize interference withcrop producl:ion. Such works would be awarded under small unit price contracts.Force account work would be limited to a maximum of 10% of all civil works.The department or agency responsible for implementation usually procures keymaterials such as cement and coal (to manufacture clay tiles and bricks)through bulk purchases following standard procedures of GOR. Materials aresupplied to contractors on a cost plus transportation basis.

3.40 Vehicles and Equipment (US$4.1 M). 3/ Field vehicles and mostequipment such as pumps, motor and electrical items for ATWs and village watersupply schemes would depend on existing servicing and spare part facilities;considerable benefits would be derived from procuring local models. No majorequipment items are to be procured as existing machinery is adequate with

1/ Approximately US$22.0 million in FY 1978/79.

2/ Cost of works, net of physical and price contingencies and administra-tion and engineering cost.

3/ Cost, net of physical and price contingencies and administration andengineering cost.

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normal expansion and replacement. Most contracts are likely to be less than

US$100,000 as the procurement rate would be decided by the need to replace

existing equipment and to match a gradual increase in capacity of implemen-

tation agencies. Because of existing servicing and spare part supply facili-

ties, there are considerable benefits to be derived from procuring local

models through normal state procedures which are acceptable to IDA.

Disbursements

3.41 Disbursement would be made for (a) 100% of the foreign expenditures

on directly imported equipment; (b) 100% of ex-factory price on locally manu-

factured goods or 70% of cost where ex-factory price is not available; (c) 70%

of expenditure on civil works financed from the budget; (d) 55% of ARDC'srefinance for modernization of watercourses, markets, ATWs and Jui Commandcomponents; and (e) 100% for technical assistance and applied research anddevelopment works. Full documentation would be made available by GOH for LCB

payments above a value of Rs 100,000 for civil works and above Rs 50,000 for

equipment and vehicles. Disbursements for other civil works and land develop-ment would be made against certificates of expenditure submitted by ARDC andGOH respectively. The supporting documents would be retained by GOH and ARDC

and made available for inspection by IDA during review missions. The esti-mated schedule of expenditures, the proposed allocation of the proceeds of the

credit and a schedule of disbursement is presented in Tables 3.5, 3.6 and 3.7respectively. It is expected that disbursements would be completed by March

31, 1983, about eight months after project completion.

Accounts and Audits

3.42 Government Departments and Agencies would be subject to normal con-

trol and auditing procedures which are satisfactory. Assurances have beenobtained from GOH that it shall cause its departments and other agencies and

authorities responsible for carrying out the Project or any part thereof to:

(i) have their accounts and financial statements related to the Project foreach fiscal year audited, in accordance with appropriate auditing principlesconsistently applied, by independent auditors acceptable to the Association;

(ii) furnish to the Association as soon as available, but in any case, notlater than four months after the end of each such year, the report of suchaudit by said auditors, of such scope and in such detail as the Associationshall have reasonably requested; and (iii) furnish to the Association suchother information concerning the said accounts and financial statements andthe audit thereof as the Association shall from time to time reasonably request.

3.43 Auditing procedures for ARDC are satisfactory. Assurances havebeen obtained from GOI that ARDC would require participating banks to maintain

separate accounts for project lending, and that audited reports would be sub-mitted to IDA within four months after the end of the fiscal year togetherwith an audited ARDC statement on project lending to such banks.

Environmental Effects of the Project

3.44 The project would have no adverse environmental effects and somebenefits would accrue from reduction of salinity and waterlogging and stabil-

ization of the advancing desert through a greenbelt formed by Jui Irrigation

Scheme.

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IV. PROJECT ORGANIZATION

General

4.01 GOH's organizational set up relevant to project components is de-tailed in Chart C-2.

Project Organization and Coordination

4.02 Implementation would be the responsibility of the following GOHagencies: Irrigation-Department (ID) for canal modernization; Haryana StateMinor Irrigation (Tubewells) Corporation (HSMITC) for watercourse lining andaugmentation tubewells; Haryana State Agricultural Marketing Board (HSAMB) formarket yarcls; and two branches of the Public Works Department (PWD): Bridgesand Roads (B&R) for village roads and Public Health (PH) for rural watersupplies. Project works in the Jui Lift Irrigation Command Area would becarried out: by line departments of GOH which will be coordinated by a CommandArea Development Authority (CADA) to be established from the existing CADAoperating iin the area (para 4.15).

4.03 (GOH has set up a Planning and Monitoring Unit to deal with projectactivities which acts through its member/secretary, the Deputy Secretary,Irrigation. The unit reports to the Financial Commissioner and Secretary,Irrigation and Power, who will act as the Project Coordinator (PC). The unitwill monitor implementation plans in physical and financial terms and projectperformance. It will also provide the liaison channel between GOH, the Asso-ciation and the various executing agencies. The unit will help to facilitateprovision of staff, equipment or other requirements necessary for satisfactoryproject progress.

Project Management

4.04 The Irrigation Department (ID). Canal modernization would beplanned, designed, scheduled and constructed by ID. Staffing would beadequate because many of the State's major irrigation projects are nearingcompletion and the ID would re-deploy experienced staff for the projectaccording 1:o the project implementation schedule. The ID would strengthenthe staff planning section engaged in GOH's canal modernization program byinclusion of a Monitoring, Evaluation and Applied Development (NEAD) unit,comprising personnel experienced in irrigation and structural engineering,water management, agriculture, and economics, and assisted by provision of6 man-years of specialized local consultancy services through the project.The unit would develop methods for improved water use under an appliedresearch and development program covering improved conveyance systems,in-system storage at various operational procedures including improvedmaintenance and irrigation methods.

4.05 .iaryana State Minor Irrigation (Tubewells) Corporation (HSMITC) isresponsible for modernization of watercourses and for the construction andoperation of augmentation tubewells. HSMITC, a corporate body empowered toutilize institutional finance, was established in 1970 to install and manage

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deep tubewells and undertake other minor irrigation works which would improveirrigation efficiencies throughout Haryana. On formation, HSMITC took overall existing public tubewells and commenced watercourse lining programs in1973; it also manufactures pumps for lift irrigation projects in Haryana andother States. At present, HSMITC operates ongoing programs satisfactorily.However, additional staffing, some improvement in management, and betterfinancial control would be required to handle the expanded work program.These improvements relate particularly to the watercourse modernization pro-gram where annual expenditures would rise from about US$7.0 million at presentto about US$21.0 under the project.

4.06 HSMITC finances its operations partly from institutional creditwith the balance provided from its own resources which include share capital,loans from GOH and income from management charges. Although watercourses areprivate property of farmers under the Haryana Canal and Drainage Act, "Divi-sional Canal officers" have powers to require shareholders to line water-courses for their proper functioning. The officers of HSMITC have been dele-gated these powers by GOH to implement the above mentioned provisions of theAct. Unlike farmers under previous CAD projects supported by the Bank Groupelsewhere in India, the farmers in Haryana are not asked to mortgage theirland against communal investment in a watercourse. Instead, HSMITC acts onthe farmers' behalf and advances the cost of the works. Participating banksprovide 80% of project cost after scheme appraisal. This portion is partlyrefinanced by ARDC on terms and conditions given in Annex 2. The remaining20% of the cost is provided by HSMITC from share capital and borrowings fromGOH. On completion of each watercourse scheme, HSMITC sends a demand list tothe Revenue Department and the cost of the improvements to the watercourses isdirectly recovered from farmers after each seasonal harvest. Collections madeby the revenue authorities are transferred to HSMITC to meet its obligationsto financing banks. An assurance has been obtained from GOH that it willguarantee debt repayments for institutional credit to be refinanced by ARDCunder the Project.

4.07 HSMITC prepares, implements, owns and manages ATW schemes forthe Irrigation Department. HSMITC's own resources finance 20% of the costsof ATW schemes with the remaining 80% obtained through institutional creditfollowing the same procedure as for watercourse lining. HSMITC sells waterfrom ATWs to the ID at a rate that covers capital and O&M costs. At present,rates are unsatisfactory as HSMITC borrows over a 12 year period (Annex 2)while the rates are calculated over the 30 year life span of the ATWs. Thishas resulted in liquidity problems for HSMITC. Under the assurance referredto in para 4.06 above, no further such problems are anticipated.

4.08 The structure of HSMITC after on-going reorganization due to becompleted by June 1979 is shown on Chart C-3. The Corporation, headed by aManaging Director, would have two operational divisions, one each for water-course lining and tubewell development. Each division would be under thedirection of a General Manager of the rank of Additional Chief Engineer andwould maintain separate financial accounts. HSMITC would establish a Manage-ment Information Unit headed by a Financial Adviser who would report to the

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Managing Director. Its function would be to modernize accounting and budget-

ing procedures so that timely and reliable information is available to man-

agement and financing banks. For the purpose of improving and strengthening

the management of HSMITC, GOH has prepared a Management Plan satisfactory

to IDA which details the setting up of effective accounting, budgeting and

inventory control systems. Assurances have been obtained from GOH that

HSMITC (i) shall implement the Management Plan by March 31, 1979 and

(ii) will appoint by December 31, 1978 a financial advisor in HSMITC with

qualifications and experience acceptable to IDA.

4.09 To promote progressive improvements in planning and design (in

particular for the Jui Lift Irrigation Command Area) HSMITC would build up

a Monitoring, Evaluation and Applied Development (MEAD) unit within its

organization headed by a Superintending Engineer qualified in this activity.

He would be in charge of a multi-discipline staff including an irrigation

engineer, an agronomist, and an agro-economist. The MEAD unit would be

supported by 4-man years of local consultancy in specialized subjects such

as water management, soils and geohydrology.

4.10 Haryana State Agricultural Marketing Board (HSAMB), responsible'

for the marketing component, was established in August 1969 to supervise

Regulated Market Committees (RMC). HSAMB is responsible for improvements to

existing markets and construction of new facilities. HSAMB is a corporate

body with broad powers to regulate, trade, own properties, borrow and grant

licenses to dealers in regulated markets.

4.11 The organization of HSAMB is shown in Chart C-4. The Marketing

Enforcement Division headed by a Chief Officer, conducts inspections of RMCs

and enforces the Marketing Act. HSAMB also maintains a technically competent

and well staffed Construction Division under a Projects Superintending Engi-

neer. Within this Division, the Construction Cell prepares designs and cost

estimates for new markets, arranges contracts for construction and supervises

works. HSAMB would strengthen its existing Project Implementation Committee

to expedite all executive decisions relating to project execution. Assurances

have been obtained from GOH that HSAMB would update the Master Plan for market

development by December 31, 1981.

4.12 HSMAB has been able to finance its on-going construction program

from own resources which include 30% (US$3.1 million equivalent in 1976/77)

of the revenue from the marketing fee and other incomes such as license fees,

interest on investments and rents. To help finance the project component,

HSMAB has sought institutional credit on terms and conditions given in Annex 2.

HSMAB would provide 20% contribution to scheme outlay from its own funds. The

remaining 80% would be made available from participating banks (Haryana State

Cooperative Bank and selected commercial banks) and after scheme approval this

credit would be partly refinanced by ARDC (Annex 2). HSMAB would repay borrow-

ings from its income. Assurances have been obtained from GOH that (i) it will

take all steps necessary to enable HSAMB to retain revenues equivalent to 1%

ad valorem of the marketing fee together with revenues from sale of plots and

rental of common drying platforms; and (ii) by March 31, 1979, HSAMB would

improve its cost accounting and financial planning.

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4.13 The Bridges and Roads (B&R) and Public Health (PH) Branches of PWDwould be responsible respectively for the design and construction of the roadsand rural water supply components through regular operational circles. B&R

has seven circles in the field and PH has six with each circle managed by aSuperintending Engineer and comprising four or five divisions each headed by

an Executive Engineer. The Additional Chief Engineer (Roads) and the Chief

Engineer (PH) would be directly responsible for execution of project compo-nents. Overall direction of water supply projects in Haryana is vested in a

State Sanitary Board (SSB) whose membership comprises five ministers; five

Commissioners/Secretaries and six senior technical officers all drawn fromdepartments associated with health and development. B&R branch is adequatelystaffed to undertake project road works but PH branch would require strength-

ening for execution of the village water supply component. Two additionalcircles with full supporting staff would be established, each comprising threedivisions.

4.14 To enable an effective post-project planning of the water supplysector, assurances have been obtained from GOH that by December 31, 1981, it

would prepare a Statewide sector survey for drinking water supply which wouldcover urban and rural areas. In particular, the study consider the relation-ship between design standards and specifications, the scope of the program and

the likely financial resources available. Four man-years of local consultanttime would be allocated to PHD, particularly to assist with design economiesand to carry out the water supply sector survey.

4.15 Command Area Development Authority (CADA). On-farm and associateddevelopment in Jui Lift Irrigation Command has been slow and improved planning

and implementation procedures need be established which would be applicableto similar areas elsewhere in Haryana. GOH has strengthened its developmentcapability within Jui Command area by setting up a Command Area DevelopmentAuthority (CADA) headed by the Administrator, Commissioner (Hissar Division).CADA will be able to deal effectively with all aspects of development, coor-dination and implementation and also monitor and evaluate the results.

Initially CADA would concentrate its efforts on the special problems withinJui Command and as other lift irrigation projects are commissioned, it wouldexpand its operations.

4.16 A technical cell will be set up in CADA headed by a technicalofficer of suitable rank and reporting directly to the Administrator (CADA).Technical staff would be recruited or seconded from various in-line depart-ments and agencies operating in lift irrigation areas and include an executiveengineer (ID) to deal with main irrigation systems; an agronomist, an agri-

cultural economist, a soil scientist, an agricultural extension officer anda water management specialist to cover problems specific to soils of the area.Technical assistance would be allocated to CADA under the project through

provision of 6 man-years of local consultant time as recruitment of somespecialist staff is likely to pose a problem. The technical cell would beprovided with necessary administrative staff and facilities to efficientlysupport operations.

4.17 A Command Area Development Supervisory Committee headed by theAdministrator (CADA) would be set up to represent all agencies and departments

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operating in the lift irrigation command areas including representatives ofID, DA, Soil Conservation Department, HAU, Extension Services, HSMITC, and theDrought Prone Area Program (DPAP). In particular, the Committee would dealwith interdepartmental problems and policy issues such as consistency in sub-sidy programs and credit terms to benefitting farmers.

Agricultural Credit

4.18 The cooperative credit and land development banking systems in theState of Haryana are generally strong and involve no unusual risks to theproject. An ongoing reorganization of primary credit societies will furtherimprove service at village level. The principle lending terms and conditionsare outlined in Annex 2. An IDA (Credit 249-IN) of US$25.0 million hassuccessfully sunported a four year lending program in minor irrigation andfarm mecharu_zation development.

Operation and Maintenance

4.19 Operation and maintenance of project components would be undertakenby implementation agencies described above except for watercourses which arethe responsibility of the beneficiaries. Assurances have been obtained thatGOH would make adequate arrangements to enable efficient operation and pre-ventive maintenance of all project components established under the project.

4.20 Irrigation. The Haryana Canal and Drainage Act of 1974 (amendedin 1976) and ID procedures provide comprehensive rules and regulations foroperation of all irrigation works throughout the State. In 1976-77, theoverall receipts of the ID from water charges (US$12.9 million equivalent)exceeded the O&M costs (US$12.4 million equivalent) and averaged aboutRs 29 (US$3.4) per irrigated cropped acre. The ID in consultation with theDepartment of Agriculture allocates water supplies on a priority basis withchoice oi cropping pattern left to farmers. Operation and maintenance ofcanals is the responsibility of an Additional Chief Engineer (Canals) whosupervises seven circles covering the State. Augmentation tubewells areoperated and maintained by HSMITC on behalf of the ID and present performanceindicates that the service is efficient. Watercourse operation is based ona time rotation or "warabundi" with each shareholder in turn taking the wholesupply for a specific time based on holding size; ID only becomes involvedin cases of dispute. Maintenance of watercourses is the collective respon-sibility of the farmers served but ID has the power to undertake maintenanceat the farmers expense should they fail to act voluntarily. Once a water-course is lined, HSMITC undertakes to maintain the channel on a contractbasis at present charging about 2% of capital cost annually. Unlinedsections of watercourses are the responsibility of concerned farmers.

4.21 Markets are operated and maintained by RMCs (para 2.14) andfinanced from about 5% of the total marketing fee revenue which is refundedby HSAMB to RMC for these activities.

4.22 Village Water Supply Schemes are operated and maintained by thePH branch of PWD. The estimated O&M cost (in 1977 prices) for tubewell and

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canal fed schemes (assuming consumption at 45 liters/capita/day) wouldaverage about US$0.7 and US$0.9 per capita respectively. There are consid-erable variations in O&M costs for individual schemes depending on locationand topography, but present financial allocations ensure that operation andmaintenance are efficient and effective. PH branch would be responsible formaintaining present O&M standards for project works.

Monitoring and Evaluation

4.23 Monitoring, Evaluation and Applied Development (MEAD) units wouldbe established in agencies responsible for project implementation in order tocheck project performance and recommend improvements to be tested throughapplied research and development. In particular, assurances have been obtainedthat GOH would set up adequately staffed MEAD units by January 31, 1979 in theID, HSMITC and the technical cell of CADA. An assurance has also been obtainedfrom GOH that the PH branch of PWD would establish by January 31, 1979 a tech-nical review unit to ensure that more cost-effective designs are developed.

4.24 Monitoring. It would be necessary to carry out a series of studiesto measure project impact of selected project components. These would includebaseline surveys to establish a datum from which overall project performancecan be measured. Furthermore, annual surveys would be undertaken after eachcrop season to measure the effects of variations in water supplies and use,cropping intensity, yields and production, crop inputs and farm incomes.Special studies would be made of areas such as Jui Command and other relevanttopics. An attempt would be made to differentiate between benefits generatedby the various project components, in particular, benefits attributable tomodernization of canals, watercourses and augmentation tubewells. Responsi-bility for ensuring that these studies are carried out would lie with theProject Coordinator (para 4.03). A lump sum of US$35,000 equivalent (45 manmonths of local consultancy time) to support the studies have been providedunder the project. The results of the studies would be forwarded to theAssociation for comment.

4.25 Project Evaluation. Technical performance and cost effectivenessof ID, HSMITC and CADA would be evaluated by units established in eachagency. Such studies would include examination of design and constructiontechniques, work study of labor intensive enterprises, quality control andspecification standards and evaluation of contracting methods. Possiblechanges in technical criteria or improvements in design would be tested ona pilot basis before general introduction. This applied research and devel-opment would be supported by a lump sum of US$100,000 equivalent providedunder the project.

4.26 Some GOH agencies might have difficulty in recruiting all specialistsrequired to staff MEAD units in a timely manner. The project would provideabout 24-man years of local consultant time to be made available to the agen-cies to assist in setting up the units and training permanent staff. The costof local consultancy would be about US$240,000 equivalent excluding pricecontingencies. Provisionally, 10-man years are allocated to ID, 4-man yearseach to HSMITC and PHD, 6 man years to CADA to cover the special problems ofthe lift irrigation areas.

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V. AGRICULTURAL PRODUCTION AND INCOMES

Agricultural Impact

5.01 Expansion of the Irrigated Area. The project would help accele-rate Haryana's agricultural development through modernization of irrigationinfrastructure to achieve a more efficient use of limited water resources. Themain increases in agricultural production would come from an increase of theirrigated area rather than from more intensive irrigation (para 2.10). In-creases in irrigated areas at full development for the main canal commandsat project completion are estimated as follows:

Bhakra West Yamuna TotalKharif Rabi Kharif Rabi Kharif Rabi

------------------ in '000 ha ---------------

Modernization of Canals 53 61 16 18 69 79Augmentation Tubewells 3 39 1 5 4 44Modernization of Watercourses 16 38 9 20 25 58Jui Command (watercourses) 6 8 6 8

Total 72 138 32 51 104 189

5.02 Based on the prevailing irrigated and rainfed cropping patterns inthe canal commands (Table 2.5), the following shifts in the cropping patternare expected to result from the project at full development:

Reduction Reduction in Increase inSeason Crop in Fallow Rainfed Area Irrigated Area

----------------'000 ha --------------------Kharif

PaLddy - 18Bajra 28 14Pulses 1 2Maize 1 4Cotton - 31Sugarcane - 9Fodder 11 26Fallow 63 - -

RabiWhLeat 4 103Barley 4 14Gram 28 40Mustard 9 10Fodder & Misc. 0 10Sugarcane 0 12Fallow 144

Total 207 86 293

5.03 Crop Yields and Production. The majority of project farmers derivemost of their present incomes from irrigated agriculture and can be expected

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to continue their practice of light irrigation (para 2.08). To be conserva-tive, no increases in irrigated or rainfed yields have been attributed to theproject (Table 2.5). However, an agricultural extension project is presentlyunder preparation for possible Bank Group financing which is likely to resultin significant yield increases.

5.04 With the above assumptions, the projected increases in agriculturalproduction due to the proposed project at full development for the main cropsexcept fodder would be:

Crop Incremental Production…-------- tons ------

Wheat 235,000Rice 57,000Bajra - - (4,000)Maize 3,000Barley 19,000Total Cereals 310,000

Pulses 26,000

Total foodgrains 337,000

5.05 Marketing. Haryana produces a significant agricultural surplus.However, India is expected to remain marginally deficient in foodgrainsand to continue to have a significant shortage of long staple cotton. Thus,the market prospects for all major crops are favorable. The State has awell developed system for marketing, storage and processing of agriculturalproduce and no serious constraints are likely to develop in the future.

Financial Prices and Crop Budgets

5.06 Prices used in the crop and farm budget analysis are given in Table5.1. Present financial prices of farm production and inputs are derived fromtrends in All-India Wholesale Prices, or when more appropriate from trendsin Haryana Harvest Prices. This averages out price variations due to weatherand change in demand. Projected financial prices (1987/88) have been expressedin constant 1977/78 terms and are based on continuation of past trends exceptfor cotton prices, which follow the projected trend for international prices.

5.07 Crop input requirements under irrigated and rainfed conditions(Table 5.2) are based on present cultivation practices and derived fromsurveys carried out by the Department of Agriculture and Haryana Agricul-tural University. Based on financial crop budgets in Table 5.2, the averagereturns per unit area brought under irrigation and per unit volume of waterare estimated as follows:

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Financial Benefits Financial Value of Water

1977/78 1987/88 1977/78 1987/88

----- Rs per ha ---- ------ Rs per m ------

Bhakra Canal CommandKharif 1,450 2,080 0.26 0.37

Rabi. 1,390 1,820 0.35 0.46

WYC CommandKharif 1,190 1,480 0.21 0.27

Rabi. 1,370 1,770 0.34 0.45

The financial value of water ¢ssumes the presSnt irrigation allocation at

watercourse outlet of 5,570 m /ha and 3,960 m /ha in kharif and rabi respec-

tively.

Cost Recovery for Irrigation Works

5.08 E'resent Level of Cost Recovery. Haryana has one of the oldest

irrigation systems in India. The irrigation network is continuously being

modernized and extended. The modernization and extension work programs

are financed both from GOH's budget and by the benefitting farmers through

institutional credit (para 5.14). Part of GOH's costs are recovered directly

through theb water charge which averages about Rs 60 per cropped ha with in-

cremental land revenue assessment of about Rs 7 per ha per year.- Indirectrecovery by GOH through the marketing fees is about Rs 60 per cropped ha.

Table 5.3 gives the cost recovery rates for irrigation works financed by the

project. Direct and indirect cost recovery at full development by canal com-

mands is given in Table 5.4. For the areas with irrigation works constructed

under the project, the cost recovery position would be:

Direct: farmers' contribution financed through credit 35%

Direct: cost recovery through water charges 11%

Indirect recovery through marketing fees 10%Net contribution from GOH budget 44%

5.09 Farmers' Ability to Pay Water Charges. The provision of irriga-

tion to rainfed land would increase net farm incomes by about Rs 1,800 per

cropped ha. The corresponding "project rent" is estimated at Rs 1,550 per

cropped ha,, The direct water charges would recover about 4% of the projectrent. However, taking into account the indirect recovery through marketing

fees and credit repayments, the average farmer benefitting from project works

would seasonally pay charges amounting to about Rs 400 per ha brought under

irrigation,, This is equivalent to about 22% of net incremental farm income

or 26% of project rent. While there appears to be a certain scope for in-

creasing water charges, the adequacy of GOH's cost recovery policy should

be evaluated in terms of: (i) the need to generate public savings to finance

future modernization and extension works in the State; (ii) usefulness of

water charges to promote efficient use of irrigation water; and (iii) equity

considerations.

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5.10 Public Savings. The present water charges are sufficient to coverthe cost for O&M of the irrigation infrastructure but do not generate a sig-nificant surplus for financing modernization and extension works. However,Haryana is making a strong resource mobilization effort in other ways. Inrecent years, GOH's revenues 1/ per capita (about Rs 190 in 1976/77) have beenabout twice the national average. Expressed as a percentage of State income,GOH's revenues are the highest in India. These revenues have enabled GOH tosuccessfully implement an ambitious program of investments in rural infra-structure. In addition to the State's own taxes, the farmers in Haryana alsopay a number of indirect taxes to GOI. While no data exist on the collectionof GOI's indirect taxes on agricultural inputs in Haryana, it is likely thatthese taxes are similar to those of Punjab (estimated at Rs 90 per cropped hain 1974).

5.11 Promoting Efficient Water Use. In general, volumetric water ratespromote a more efficient water use than acreage based water charges. However,in Haryana, each farmer is allocated a fixed amount of water, which dependson the size of his holding. Because water is rationed, the farmer selectshis crops and his intensity of irrigation in such a way that he optimizes hisreturn to water. In the absence of major distortions in the relative pricestructure of major crops, this allocation system generally leads to an econo-mically efficient use of water as long as the water rates per ha remain low.Volumetric charges would be preferable but the unlined watercourses, existingat present, do not permit an accurate measurement of the water supplied to eachfarmer. The modernization of watercourses would make it technically feasibleto establish volumetric water charges and agreement will be reached with GOHto explore this possibility as part of a study of cost recovery policy (para5.13).

5.12 Equity Considerations. At present, two-thirds of the farmers inHaryana have access to irrigation. The completion of lift irrigation schemesin the southern part of the State would bring virtually the whole State underthe command of surface irrigation schemes. Thus, it is primarily a matterof administrative convenience and political expediency whether the irrigatedfarmers contribute to GOH's budget through water charges or other chargeslevied directly or indirectly on the rural population. GOI's long termobjective is to improve the irrigation systems so that all farmers in theproject area are treated in an equitable manner and therefore a uniform ratestructure could be applied. If the water charges are to be increased to re-cover the full cost of lining, they have to be applied to all farmers in thecommand of the system even though short term many farmers would not benefit.This would not be politically feasible since the farmers in the existingsystem, with certain justification, would argue that "their" system isalready paid off and that they would not benefit directly from the moderni-zation works.

1/ Net of GOH's share of central taxes and transfers from GOI.

- 35 -

5.13 G(O.iq will face the problem of equitable cost recovery in all futureirrigation modernization projects. Therefore, the system of water chargeswould have to be analyzed on a Statewide basis and within the framework ofthe State's agricultural taxation system. An assurance has been obtained fromGOH that it will complete and make available to the Association for its com-ments not later than March 31, 1980, a statewide review of alternative methodsof collecting water and water-related charges in modernized irrigation proj-ects with special emphasis on volumetric water pricing. The review shall,inter alia, have regard to: (i) farmer's capacity to pay water charges;(ii) farmers' incentives for adopting procedures of modern irrigated agricul-ture; (iii) the effects of the alternative collecting methods on GOH's revenues;and (iv) comparable systems of water-related charges in other states inIndia.

Repayment for Modernization of Watercourses

5.14 Repayment terms for modernization of watercourses in gravity areaswould be at 10.5% interest per annum over a 10-year period including one yearof grace. For operational reasons, repayments are made after each harvest onthe basis of total areas held (CCA) as opposed to area under irrigation. Fora typical watercourse, equal repayments are estimated to be about 104 Rs/haper crop season. Substantial variations in costs would inevitably occur fromwatercourse to watercourse depending on the ratio of area to length of lining.Since repayments are levied on the total watercourse area, they are most use-fully compared with average income per ha of CCA after project completion;they can also be compared with the average incremental income per ha of CCAas follows.

Average Income Average IncrementalAfter Lining Income

(Rs per ha CCA)Year Season

1977/78 kharif 860 70rabi 930 150

1987/88 kharif 1,100 90rabi 1,260 210

Although repayments can represent a substantial proportion of incrementalincome, they are nevertheless very modest when compared to average incomes.

5.15 F'or construction of lined watercourses in Jui Command area, HSMITCwould repay the participating banks at 10.5% interest per annum over a 10 yearperiod including one year of grace. GOH would pay the total demand on thedue date to HSMITC but recover from the farmers over an extended period to bedecided onc:e the farmers' capacity to pay has been established.

Cost Recovery for Village Water Supply

5.16 IJntil recently, the full O&M cost of all rural water supply schemeshas been borne by GOH. In April 1976, GOH authorized collection of waterrates for villages under existing powers contained in the Panchayat Act of

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1952. As a start, the authorized rates were intended to recover only partof O&M costs and were fixed at Rs 18, 12 and 6 per annum respectively for thethree household categories liable to pay house tax at the current rates ofRs 7, 5 and 3 per annum. Water rates are collected by the Revenue Departmentat the same time as the house tax which is payable in two installments. Ifrates are held at their present level, water rate revenue collected from the175 villages included in the project would amount to about 40% of total O&Mcosts from project schemes. However, the Panchayats have not made use ofthe April 1976 authorization, and no water rates are being collected atpresent.

5.17 Assurances have been obtained from GOH that a water supply schemeunder the project would be implemented only after (i) the Panchayat 1/ con-cerned has undertaken to contribute a portion of the operation and maintenancecosts as determined by GOH having regard to the financial position of thePanchayat and the views of IDA with respect to the criteria for such deter-mination, and (ii) the concerned Panchayat has deposited such determinedportion of the estimated operation and maintenance costs for the first yearof operation of the water supply scheme.

VI. ECONOMIC ANALYSIS

General

6.01 All project components are integral parts of GOH's agriculturaldevelopment strategy and would further the welfare of rural people throughincreases in income and direct provision of services. GOH is aiming at abalanced development of directly productive investments, production supportprograms (such as village electrification) and social infrastructure withparticular emphasis given to the less developed areas of the State. Thisstrategy has achieved success to date with increases in agricultural produc-tion averaging 6% per year over the past decade. During the same period totalState production has grown at 5.5% per annum or 3.5% per annum for income percapita. Haryana, together with the neighboring State of Punjab, has the leastincidence of poverty in India.

6.02 The project would directly increase annual agricultural productionby about 340,000 tons of foodgrains (para 5.04) at full development providingan annual incremental net income to the farmers of about Rs 520 million (US$60million) in 1987-88. In addition, it would generate significant indirecteconomic and social benefits as in the case of village water supply component.Indirect benefits have not been quantified because of lack of data and widevariation from scheme to scheme. The focus of this analysis is on directproduction effects due to expansion in irrigation. The overall economic rateof return has been calculated on the basis of these benefits only but includesall project costs.

1/ Local authority at village level.

- 37 -

Beneficiaries

6.03 Main project beneficiaries include Haryana farmers, Indian foodgrain

consumers and labor. Farm employment would increase by about 17 million man-

days per year in Bhakra canal command and 4 million man-days per year in WYC

command. I'he project would also generate about 61.5 million man-days of con-

struction employment over a four-year period. Indian consumers would benefit

from the project through sales of low priced foodgrains under GOI procurement

schemes.

Basic Assumptions

6.04 The economic analysis follows standard Bank methodology. However,

instead of usinp shadow exchange rate to convert foreign exchange costs

and earnings iLO local market prices, a standard conversion factor of 0.80

(equivalent: to a shadow exchange rate of US$1.00 = Rs 10.75) has been applied

to domestic market prices to translate them into border prices. Present and

projected economic prices of traded goods, such as wheat, paddy, cotton and

fertilizers, are based on the Bank's commodity price forecasts adjusted for

transport, handling and processing costs. Economic prices of non-traded

foodgrains, such as gram, are derived from financial prices using a foodgrain

conversion factor; the latter is the weighted average of economic to financial

price ratios of wheat and paddy. The economic cost of farm labor is assumed

at two-thirds of market wages based on experience from other projects in

India. Al1L price assumptions are shown in Table 6.1. Economic crop budgets

are given in Tables 5.2a and 5.2b.

Analysis oi. Irrigation Components

6.05 Miodernization of Canals. The only benefits quantified are produc-

tion increases due to reduction in seepage losses from canal lining with full

benefits achieved with a uniform build up over four years. Additional benefits

which are Significant but cannot be readily quantified are reduction in

waterlogging, provision of increased canal capacity, reduction in weed growth

on canals in Bhakra command and improved canal operation.

6.06 Reductions in seepage losses depend upon on soil types, the wetted

perimeter of the canal section and the operating hours of a canal. The see-

page rate Eor a lined canal is taken as 2 cusecs per million sq. ft. of wetted

surface. There are considerable variations in soil types through the project

area and two types of soils have been retained for the analysis. Sandy loams

and loams are assumed to have seepage rates of 8 cusecs and 6 cusecs per mil-

lion square feet of wetted channel surface respectively. Wetted perimeters

are based on typical cross sections for lined and unlined channels of 100

cusecs capacity. Canals are assumed to operate for 75% of the time. Capital

costs for modernization of canals are given in Table 6.1 and O&M costs are

assumed to remain unchanged. The economic rate of return (ERR) for the

modernization of canals component is estimated at 49%.

6.07 Modernization of Watercourses. Capital costs of watercourse lining

are given in Table 6.1. Incremental maintenance costs have been assumed at

2% of capital costs per annum. Benefits include increased irrigated area due

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to reduction in seepage losses, improved operation and a more equitable dis-tribution of water within the watercourse command. Project analysis has beenbased on performance of existing lined watercourses in Haryana. A sample of52 watercourses shows that after lining 55% of the channel length, the averageincreases in irrigated area have been 14% and 33% in kharif and rabi respec-tively or about 24% annually. These increases are achieved in the first cropseasons after completion of works. The crop yields on the additional irri-gated areas are the same as the existing irrigated areas in a watercoursecommand. These figures used in the analysis underestimate benefits forproject watercourses since on an average 75% of the channel length would belined (para. 3.15). Under these assumptions, the ERR is estimated at 35%.

6.08 Augmentation Tubewells. Unit capital costs of ATWs are given inTable 6.1. O&M costs have been differentiated between areas of fresh andsaline groundwater since in the latter areas more frequent replacements ofthe pump unit and well casing is 5equired due to corrosion. It is assumed

that each ATW would provide 200 m per hour and run for 4,000 hours per year.Water would be added to the existing surface irrigation systems with about 10%supplied in kharif and 90% in rabi. Power consumption per well would be about80,000 kwh per year supplied at an economic price of 0.30 Rs/kwh. With theseassumptions, the ERR is estimated at 43%.

6.09 Jui Lift Irrigation Command. The component completes the develop-ment of a self-contained project typical of lift irrigation schemes in south-west Haryana (para 2.13) where farmers are amongst the poorest in the State.In the past, GOH support has been necessary in terms of direct famine reliefand employment programs such as road construction. Full development of thisarea would diminish the need for such programs and also assist with desertreclamation by protecting the region from sand storms and advance of theRajasthan desert. Finally, the experience gained by GOH in respect of improvedtechnology packages, better organization and implementation procedures couldlead to substantial savings in future developments of other lift irrigationschemes in Haryana.

6.10 Capital costs assume watercourses lined to 100% length and landlevelling for 40% of the project CCA. The unit cost of lining is as in gravityareas (Table 6.1) and the average cost of land levelling is 833 Rs/ha ineconomic terms. At full development, benefits would be about 2,000 Rs/ha inkharif and 1,600 Rs/ha in rabi in economic terms based on data collected inJui Command. Full development would be attained in four years and benefitsare estimated to materialize at 40%, 60% and 80% in intermediate years. TheERR for a typical watercourse would be 27% when only productive benefits areconsidered with very low sensitivity to the cost of land levelling.

Construction of Markets

6.11 The high proportion of agricultural marketable produce in Haryanamakes provision of efficient facilities for marketing, storage and processingof particular importance. Benefits of new markets include reduced transittimes and congestion, reduced handling and storage losses, quality gradingand improved hygiene, promotion of more competitive trading conditions and

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avoidance of malpractices. At present, trade often takes place in the con-

gested centers of towns resulting in delays to cultivators, intermediaries

and other market users. In the new markets, handling and storage losses would

be reduced both in the marketplace and in the fields where delays in threshing

and rain damage can occur because of the glut at traditional markets. New

market facilities will foster development of market intelligence, and facil-itate enforcement of grading norms. The average cost for handling of theproduce at a market is estimated at Rs 15-20 per ton when the capital costsare discounted at 12%. This is less than 2% of the value of the tradedproduce. At present, no reliable estimates of the storage and transit losses

are available for existing markets in Haryana but performance elsewhere inIndia indicate that losses are likely to be reduced much more than 2%. It is

concluded that the ERR would exceed 12% and that each new market can bejustified on efficiency grounds alone without taking into account the sub-stantial social benefits.

Rural Roads

6.12 The rural roads component would help move agricultural productionto markets and ease the distribution of inputs particularly in the monsoonseason. Undesr the project, 950 villages would be connected by 945 km ofvillage roads to existing all-weather roads (para 3.30); this would raise theproportion oE villages connected by all-weather roads from 81% to 92%. Inaddition, 377 km of existing roads would be improved. The road componentforms an inseparable part of the overall project and its justification isreflected in the high overall project ERR of 32% (para 6.14).

Rural Water Supply

6.13 About 62% of villages in Haryana are classified as "scarcity" withregard to domestic water supply in that they either have (a) no source ofwater within 1.6 km, (b) no well water within 15 meters depth or (c) a supplywhich is hazardous to health because of high salinity, excessive flouride con-tent or waterborne disease. The project would serve a present population ofabout 313,OOD at an investment cost of Rs 276 (US$32) per capita, or Rs 184(US$21) per capita bases on the projected population in year 2007. Assuming

a consumption of 16.4 m per capita per day, economic average costs of supplyat 12! opportunity cost of capital for canal fed and tubewell schemes are asfollows:

Running Costs CapitalSource 0&M Power Costs Total

------- (1977/78 Rs per m )-------- (US)

Canal fed 0.17 0.15 1.60 1.92 (0.22)Tubewells 0.16 0.06 1.07 1.29 (0.15)

These costs of supply compare favorably with rural water schemes in othercountries even though the natural environment in Haryana is relativelyunfavorable. Benefits would mainly comprise of improved water quality,considerably reduced time and effort in fetching water and improved sanitary

conditions.

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Project Economic Rate of Return

6.14 The ERR for project components are summarized below:

Component Economic Rate of Return

Modernization of canals 49%Modernization of watercourses 35%Augmentation tubewells 43%Jui Command 27%Overall Project 32%

The results reflect important sunk costs because the main irrigation systemsalready exist and constitute a valuable underexploited asset.

Uncertainty and Project Risk

6.15 Agriculture in Haryana is sensitive to variations in quantity andtimeliness of rainfall, and to other natural phenomena even under irrigatedconditions. However agricultural variability has limited significance par-ticularly as no increase in yields have been attributed to the project. Theproject analyses are based on benefit figures for a normal year. For theirrigation components and the overall project, the results of a sensitivityanalysis are as follows:

Economic Rate of ReturnVariation Variation Modernization Modernization Overallin Costs in benefits of Canals of Watercourses ATWs Project

- 49% 35% 43% 32%- -20% 42% 29% 35% 26%

+10% - 46% 32% 40% 34%+10% -20% 39% 26% 32% 24%

Project costs are based on actual costs of on-going programs and benefits areestimated from monitored performance of completed works; neither are likely toshow substantial changes.

6.16 The main uncertainties arise in (i) seepage reduction through canallining, (ii) response to watercourse lining and (iii) the build up rate tofull benefits. The first can be assessed by establishing minimum savingsin seepage losses from unlined canals which would justify lining. At 12%opportunity cost of capital, the minimum savings in seepage losses are 0.30and 0.44 cusecs per million sq ft of wetted canal surface for Bhakra canalcommand and WYC command respectively. This compares with minimum savings inseepage losses of about 4.0 cusecs per million sq ft when canals are lined inloam soil areas (para 6.06). Uncertainty for watercourse lining relates toexpected response to different lengths of lining within a typical watercourseas opposed to wide variations from the average known to exist between indi-vidual watercourses. For the model watercourse (para 6.07), the assumedannual increase in irrigated area is about 24% whilst the minimum annualincreases which justify watercourse lining would be as follows:

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Canal Command Length of Lining50% 75% 100%

Bhakra 7% 11% 14%

West Yamuna 9% 13% 17%

Project analysis is most sensitive to the build up rate of benefits. There is

substantial data to support the assumption that full benefits to modernizationof watercourses would be achieved in the first season after completion of the

works. The impact of the additional water supplies from modernization of

canals and augmentation tubewells is more difficult to estimate. The decidingfactor is likely to be the amount of additional water in each canal command.

If the increase in water supplies is small, the farmers would be slow to expand

the irrigated area. However, if irrigated area is not expanded, the water useper cropped ha and thus crop yields would increase. Therefore a uniform build

up in benefits over four years would conservatively reflect the impact of mod-

ernization of canals and the ATW component. Variation in the build up rate tofull benefils would change the ERR as follows:

Full Benefits Full BenefitsComponent in 4 Years in 2 Years

-- Economic Rate of Return ---

Modernization of Canals 49% 59%Augmentation Tubewells 43% 54%Overall Project 32% 35%

6.17 It is concluded that the main uncertainties do not affect the

economic soundness of the project. The project is economically justifiedeven if full benefits build up at the slower rate of production outcomes.

VII. AGREEMENTS REACHED AND RECOMMENDATIONS

7.01 Assurances have been obtained from GOI and GOH that:

(a) Haryana shall provide funds sufficient to execute theProject substantially in accordance with an implemen-tation schedule agreed with the Association (para 3.38).

7.02 Assurances have been obtained from GOI that:

(a) the proceeds of the credit for modernization of canals,village roads and water supply schemes would be channeledto GOH on GOI's standard terms and arrangements for devel-cpment assistance to the States (para 3.38).

7.03 Assurances have been obtained from GOI and ARDC that:

(a) clisbursements for modernization of watercourses, augmen-tation tubewells, markets and Jui Command components

- 42 -

would be made available to ARDC (para 3.38) and relenton terms and conditions given in Annex 2; and

(b) ARDC shall cause the Lending Banks to: (i) maintainseparate accounts for loans made; and (ii) send to theAssociation through ARDC their audited accounts (togetherwith an analysis of overdue and bad debts and a state-ment certified by ARDC of their Project lending) notlater than four months after the end of each fiscalyear (para 3.43).

7.04 Assurances have been obtained from GOH that:

(a) HSMITC shall prepare and adopt by December 31, 1978, anappropriate design manual satisfactory to the Associationfor carrying out of the modernization of watercourses com-ponent (para 3.17);

(b) it shall cause its departments and other agencies andauthorities responsible for carrying out the Project or anypart thereof to: (i) have their accounts and financial state-ments related to the Project for each fiscal year audited,in accordance with appropriate auditing principles consis-tently applied, by independent auditors acceptable to theAssociation; (ii) furnish to the Association as soon asavailable, but in any case, not later than four months afterthe end of each such year, the report of such audit by saidauditors, of such scope and in such detail as the Associa-tion shall have reasonably requested; and (iii) furnishto the Association such other information concerning thesaid accounts and financial statements and the audit thereofas the Association shall from time to time reasonably request(para 3.42);

(c) it will guarantee debt repayments for institutional creditto be refinanced by ARDC under the Project (para 4.06);

(d) By March 31, 1979, GOH would: (i) implement a ManagementPlan for HSMITC satisfactory to IDA; and (ii) by December 31,1978, recruit a Financial Advisor with qualifications andexperience acceptable to IDA (para 4.08);

(e) By December 31, 1981, HSAMB would update the Master Planfor market development (para 4.11);

(f) it will take all steps necessary to enable HSAMB to retainrevenues equivalent to 1% ad valorem of the marketing feetogether with revenues from sale of plots and rental ofcommon drying platforms (para 4.12).

(g) By March 31, 1979, HSAMB would improve cost accounting pro-cedures and financial planning (para 4.12).

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(h) PHD would prepare a statewide sector survey for drinkingwater supply covering urban and rural areas, by December 31,1981 (para 4.14);

(i) GOH would make adequate arrangements for efficient operationand preventive maintenance of all project components estab-lished under the project (para 4.19);

(j) GOH would set up adequately staffed MEAD units by January 31,1979 in the ID, HSMITC and the technical cell of CADA. ThePH branch of PWD would also establish by January 31, 1979 atechnical review unit to ensure that more cost effectivedesigns are developed (para 4.23);

(k) it will complete and make available to the Association forits comments not later than March 31, 1980, a statewidereview of alternative methods of collecting water and water-related charges in modernized irrigation projects withspecial emphasis on volumetric water pricing. The reviewshall, inter alia, have regard to: (i) farmer's capacityto pay water charges; (ii) farmers' incentives for adoptingprocedures of modern irrigated agriculture; (iii) the effectsof the alternative collecting methods on GOH's revenues; and(iv) comparable systems of water-related charges in otherstat:es in India (para 5.13);

(1) a water supply scheme under the project would be implementedonly after ti) the Panchayat concerned has undertaken tocont:ribute a portion of the operation and maintenance costsas determined by GOH having regard to the financial positionof t:he Panchayat and the views of IDA with respect to thecril:eria for such determination; and (ii) the concernedPanchayat has deposited such determined portion of the esti-mated operation and maintenance cost for the first year ofoperation of the water supply scheme (para 5.17).

7.05 A condition of effectiveness of the Project would be that:(i) the financial arrangements between GOI and ARDC have beenmade; and (ii) the Association has received a banking plansatisfactory to the Association giving details of refinancingof loans by the Lending Banks through ARDC (para 3.38).

7.06 Conditions for disbursement for the project would be that:

(a) expenditures for each of the first five produce markets underthe Project until the Association has first approved thedesign of such a market (para 3.28);

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(b) expenditures for each of the first five village water supplyschemes of the Project until the Association has first ap-proved the design of such a scheme (para 3.33); and

(c) expenditures for each of the first ten watercourses of theProject until the Association has first approved the designof such a watercourse (para 3.23).

7.07 With the above assurances and conditions of credit effectivenessand disbursements, the project would be suitable for an IDA credit ofUS$111.0 million on standard IDA terms. The borrower would be the Govern-ment of India.

July 19, 1978

INDIA

HARYANA IRRIGATION PROJECT

Climatological DataAverage monthly rainfall (mm), temperature (oC)

and Mean Relative Humidity (%)

Locality Naraingarth Karnal FatehabadDistrict TAmbala) (Karnal) (Hissar)Month Rainfall Temp Humidity Rainfall Temp Humidity Rainfall Temp Humidity

mm oC % mm oC % mm oC %

J 31.0 12.8 76 15.2 14.2 68 10.7 12.2 80

F 25.4 15.8 69 9.3 15.6 62 12.0 14.2 74

M 10.0 21.8 65 4.9 21.3 57 12.6 20.3 65

A 22.8 27.4 44 6.5 27.1 45 1.2 26.6 49

M 71.8 30.6 40 12.8 30.0 41 21.2 31.1 44

J 263.6 32.1 58 86.1 31.4 53 20.8 32.9 52

J 326.6 30.2 79 155.6 30.1 74 75.9 31.1 70

A 443.8 30.0 84 326.4 28.7 82 135.1 29.2 80

S 129.2 28.6 82 26.8 27.4 67 34.9 28.4 71

0 67.6 24.3 64 16.8 24.1 60 6.8 25.2 65

N 4.0 18.8 67 11.1 18.9 57 6.3 18.3 73

D 19.6 14.0 79 18.3 15.6 76 3.7 13.1 83

Annual 1,415.4 689.8 341.2Rainfall

Period forabove records '70-74 '70-72 '72-74 '70-74 '70-72 '72-74 '65-75 '66-75 '72-74

Sources: Statistical Abstracts of Haryana

State Deputy Commissioners

Haryana Agricultural University

INDIA

HARYANA IRRIGATION PROJECT

Seasonal Surface Irrigation Supply

--------------------- Bhakra Canal Command ------------------------ ------------------ Western Yamuna Canal Command 3/------------------

71/72 72/73 73/74 74/75 75/76 Mean 71/72 72/73 73/74 74/75 75/76 Mean

Kharif

Irrigation supply at main canal head 2,906.0 3,088.0 3,272.0 2,708.0 2,993.0 2,993.0 1,952.0 2,138.0 2,071.0 1,929.0 2,153.0 2,049.0(Mm3) (2.43 M ac-it) (1.66 M ac-ft)

Area irrigated 375.0 413.0 422.0 390.0 423.0 405.0 237.0 252.0 273.0 295.0 299.0 271.0('000 ha) '10 67 M *c)

Area Irrigated as percentage of CCA 1/ 32.1 35.4 36.1 33.4 36.2 34.7 21.8 23.2 25.1 27.2 27.6 25,0

Gross supply per ha of crop (m ) 7,390 7,561(6.0 ac-ft) (6.14 acoft)

Rabi

Irrigation supply at main canal head 2,691,0 1,996.0 2,716.0 1,766.0 2,960.0 2,426.0 1,689.0 1,282.0 1,837.0 1,657,0 1,882.0 1,669.0(Mm

3) (1.97 M ac-ft) '135 M ac-ft)

Area irrigated 501.0 485.0 496.0 415.0 409.0 481.0 422.0 404.0 476.0 444.0 487 0 447.0('000 ha) (1.19 M ac) '1.10 M at)

Area irrigated as percentage of CCA 2/ 42.9 41.6 42.5 35.6 43.6 41.2 38.9 37.2 43.9 40.9 44.9 41.2

Gross supply per ha of crop (m3) 5,044 3,734(4.09 ac-ft) (3.03 ac-ft)

Total for year

Irrigatilo3 supply 5,597,0 5,084.0 5,988.0 4,474.0 5,953.0 5,419.0 3,641.0 3,320.0 3,908.0 3,586.0 4,035.0 3,718.0(Mm ) (4.39 M ac-ft) (3,01 M ac-ft)

Area irrigated 876.0 898.0 918.0 805.0 932.0 886.0 659.0 656.0 749.0 739.0 786.0 718.0(000 ha) (2.19 M ac) '1.77 M at)

Area irrigated as percentage of CCA 2/ 76.0 77.0 78.6 69.0 79.8 75.9 60.7 60.4 69.0 68.1 72.5 66.2

1/ CCA of canal commands remained nearly constant 1971/76 with Bhakra Command at 1.17 M ha (2.88 M acres) and West Yamuna Command at 1.09 M ha (2.68 M acres).

2/ Including sugarcane for both kharif and rabi.

3/ Deducting supplies to Pumped-Lift irrigation areas.

Source: The Irrigation Department, GON

47

INDIA TABLE 2.3

BARYANA IRRIGATION PROJECT

2pproximate Annual Groundwater Recharge and Utilization in Haryana, (April 1. 1976)

(M m3)

Proposed ProjectUaaible Total Recharge Percent Augmentation

District A B C D Recharge Draft BalAnce Utilization Tubewells (No.)

Ambala 725 449 192 - 1366 917 449 67 -

Bhiwani 277 127 63 212 255 106 149 42 -

Gurgaon 468 407 260 45 1,090 895 195 82 -

Hissar 441 905 371 432 1,285 463 822 36 175

Sirsa - 534 183 292 425 216 209 51 350

Jind 286 221 209 115 601 309 292 51 75

Karnal 490 1,472 423 7 2,378 1,766 612 74 -

Kurukshetra 306 491 404 - 1,201 1,669 (468) 139 -

Mohindergarth 332 48 102 - 482 510 ( 28) 106

Rohtak 302 112 182 138 458 388 70 85 -

Sonepat 237 407 123 44 723 292 431 40 -

Total State 3,864 5,173 2,512 1,285 10,264 7,531 2,733 73 650

Explanation: A - Recharge from rainfall.B - Rec'harge from seepage from canals, rivers, drains.C - Recharge from applied irrigation water (canals or tubewells).D - Recharge from A + B + C going to marginal saline groundwater areas.Usable Recharge = (A + B + C) - D

Notes: No allowance for underflow in or out of areas or evaporation from shallow water tables.No account of potential recharge which could be induced bv appropriate groundwatermanaRement or Dhvsical changes to the balanct duie to consi modernization works

Proposed ATWa generally utilize marginal and saline groundwater (see Annex 5, SDV for details).

Source: Haryana State Minor Irrigation (Tubewells) Corporation.

48TABLE 2.4

INDIA

HARYANA IRRIGATION PROJECT

Present Under-Irrigation by Canal Commands

PART A: Net Required Irrigation for Present Canal Irrigated Cropping Pattern (1971/72-1975/76)

WEST YAMUNA CANAL COMMAND BHAKTRA CANAL COMMAND

Net irrigation Area of the crop Net irrigation Area of the crop Net irrigationrequired for per unit ha of required for per unit ha of required for

seasor[7 all irrig. crops-! area (b) all irrig. crops_! area (b)(cu. m/ha) (ha) (cu. m/ha) (ha) (cu. m/ha)

(a) (b) (c) (b) (c)

Kharif

Paddy 8,500 .27 2,295 .15 1,275

Cotton 5,300 .06 318 .41 2,173

Bajra 1,000 .14 140 .10 100

Jowar, maize, fodder, misc. 1,600 .21 336 .29 464

Sugarcane-/ 8,800 .22 1,936 .05 440

Net irrig. required for 1 ha of the compositecropping pattern 1.00 5,025 cu. m 1.00 4,452 cu. m

Rab i

Wheat and barley 3,850 .56 2,156 .66 2,541

Gram 3,520 .23 810 .12 422

Rape and mustard 3,000 .05 150 .03 90

Fodder- and misc. 6,000 .11 660 .07 420

Sugarcane-/ 5,950 .05 298 .12 714

Net irrig. required for 1 ha of the compositecropping pattern 1.00 4,074 cu. m 1.00 4,187 cu. m

PART B: Comparison of Water Supply and Nominal Demand for Full Irrigation (cu. m per ha)

WEST YAUNA CANAL COMMAND Bb AKRA CANAL COMMAND

Kharif season

(a) Gross supply to canal head per haof irrigated crop.

7 , 5 616/ 7,39C/

(b) Net crop water requirements per haof composite crop 5,025 4,452

(c) Gross irrigation requirement per ha for fullirrigation assuming 50% irrigation efficiency 10,050 8,904

Under Irrigation a percent 752 83%C

Rabi season

(a) Gross supply to canal head, per ha ofirrigated crop

3 ,7 3 4 -/ 5,0446/

(b) Nominal crop requirements per ha ofcomposite crop, for full irrigation. Net 4,074 4,187

(c) Cross irrigation requirement per ha for fullirrigation, assuming 50% irrigation efficiency 8,148 8,374

Under Irrigation a percent 46% 601

I/

2 /See Annex 3 for estimates of crop water requirements.-,See Table 2.5 for details of present canal irrigated cropping pattern.4/April through September.

5 /Including beerseem.,October through March.

- See Table 2.2

April 1978

49 TABLE 2.5

INDIA

HARYANA IRRIGATION PROJECT

Present Cropping Patterns and Yields by Canal Commands

Bhakra Canal West Yamuna Canal

% % of % % of

Yields by Crop Cropped by Crop Cropped

tons/ha Season Area Season Area

IRRIGATED AREA

Kharif

Paddy (HYV) 3.5 7 2.8 13 3.5Paddy (Other) 2.8 8 3.3 14 3.7

Bajra (iIYV) 1.4 10 4.1 10 2.6Bajra (Other) 0.8 - - 4 1.1

Pulses 1.0 1 0.4 2 0.5

Maize 1.2 3 1.2 5 1.3

Cotton (American) 1.2 23 9.3 2 0.5

Cotton (Other) 0.8 18 7.4 4 1.1

Sugarcane 45.0 5 2.0 22 5.8Fodder and Misc. 32.5 1/ 25 10.3 24 6.4

Total 100 40.8 100 26.5

Rabi

Wheat (Mexican) 2.5 33 14.1 58 28.3

Wheat (Other) 2.0 23 9.7 3 1.5

Gram 1.0 23 9.7 12 5.9

Mustard 1.0 5 2.0 ;3 1.5

Barley 2.0 7 3.0 5 2.5

Sugarcane 45.0 5 2.0 12 5.9

Fodder and Misc. 32.5 1/ 4 1.7 7 3.5

Total 100 42.2 100 49.1

Irrigated Cropping Intensity 2/ 83.0 (75.9) 3/ 75.6 (66.2) 3/

RAINFED AREA

Khari f

Bajra (HYV) 1.0 2 1.2 6 4.4Bajra (Other) 0.6 24 14.2 29 21.3Pulses 0.6 1 0.6 2 1.5Maize 0.9 1 0.7 2 1.5Fodder 20.5 1/ 10 5.9 15 11.0Fallow 62 36.7 46 33.8

Total 100 59.2 100 73.5

Rabi

Wheat (Mexican) 1.5 - - 1 0.5Wheat (Other) 1.0 1 0.5 6 3.0Gram 0.6 13 7.6 26 13.3Mustard 0.45 5 2.9 5 2.5Barley 1.2 2 1.2 3 1.6Fallow 79 45.6 59 30.0

Total 100 57.8 100 50.9

Rainfed Cropping Inl:ensity 4/ 34.7 60.6

Annual Cropping Intensity 117.7 136.2

1/ Based on green Jowar (fodder sorghum).2/ Included some area partly irrigated from private tubevells.

3/ Average irrigated cropping intensity for 1971-1976 from surface irrigation supply only (see Table 2.2).4/ Excluding fallow.

Source: Directorate of Agriculture district production data.

TNDTIA

HARYANA IRRIGATION PROJECT

Irrigation Components - Unit Costs

4'Part A - Modernization of Canals 1/ Part B - Modernization of Watercourses 2/ Part C - Augmentation Tubewells (1st stage)-(cost/100 ft2 of lining) (cost/ft run of lining)

Item Cost Item Cost Item Cost/Tubewell(Rs) (Rs) (Rs)

Channel Lining Watercourse Lining Preliminarv Buildings 6,000

Materials 76.09 Materials 5.42 Land Acquisition 9,500Labor 43.00 Labor 3.70Equipment 3.68 Construction of Tubewell 59,200

Sub-total 122.77 Sub-total 9.12 Pumping Unit + 10% Spares 30,500

Improvement to Control Minor Structures 3/ Capacitor 5,000and Access Structures (25% of lining costs) 2.28(30% of lining cost) 36.83 Well Head Completion Civil Works 1,500

Sub-total 159.60 Sub-total 11.40 Collection Channels 130,000

General Items (8.0%) 12.76 General Items (18.6%) 2.12 Sub-total 241,700

Sub-total 172.36 Sub-total 13.52 Engineering 19,340

Engineering (11%) 18.96 Department Charges (12.5%) 1.69 Sub-total 261,040

Sub-total 191.32 Sub-total 15.21 Physical Contingency (10%) 26,100

Physical Contingency (5%) 9.57 Physical Contingency (5%) 1.62 Cost per Water Point 287,140

Total Cost 200.89 Total Cost 15.98 Cost of Electrification(equivalent cost US$) 23.36 (equivalent cost US$) 1.86 per Well Point 106,450

Total Cost per Tubewell 393,590 r(equivalent cost US$) 45,770

1/ Costs generated from on-going programs for canal modernization with single layer of tile lining.2/ Based on costs of completed program (1,200 watercourses).3/ Farm outlets and mincr access structures.4/ First stage of 325 ATWs with link channels and electrification so that additional 325 ATWs can be added in the second stageto complete a program of 650 ATWs.

INDIA

HARYANA IRRIGATION PROJECT

COSTS FOR TYPICAL MARKET YARDS

(Rs x '000)

Ref. No. Item Units --------------------------------------Market Yard Types------------------------- ___-_

Market 'Al Market 'B' Market 'C' Market 'D'Quantity Cost Quantity Cost Qujantit Cost Qn"fi4, Cost

1. Levelling Land Scaping acres 50 to 100 500 35 to 50 250 25 to 35 175 15 tD 25 75

2. Individual Auction sq. ft. 450,000 2,700 174,000 1,044 98,400 590 52,800 317Platforms

3. Street Lighting per acremarket area 50 to 100 1,000 35 to 50 500 25 to 30 350 15 to 25 150

4. Metalled Roads sq, ft. 450,000 1,350 300,000 900 330,000 990 110,000 330

5. Food Storage Godown metric tons 15,000 3,000 10,000 2,000 5,000 1,000 2,500 500

6. Boundary fall per sq. ft. 000 320 5,800 232 4,100 164 3,000 120

7. Grading Unit Equipment No. 3 60 2 40 1 20 1 20

8. Chek Posts & Gates No. 4 80 4 80 2 40 2 40

9. (a) Common Drying Platforms sq. ft. 700,000 4,200 266,800 1,600 68,400 410 28,800 173

(b) Covering the Common Drying 9q ft- 350,000 5,250 133,400 2,000 34,200 510 28,800 432Platform

10. Water-cooler Rooms No. 4 100 2 50 2 50 1 25

11. Public Toilets No. 4 100 2 50 2 50 1 25

12. Building for Post-Officeand Bank sq. ft. 9,600 580 4,800 290 3,500 435 2,400 145

13. Water Supply & Sewage per acremarket area 50 to 100 2,300 35 to 50 1,500 25 to 35 1,050 15 to 25 450

14. Weigh Bridge sq. ft. 2 220 1 110 1 110 - -

15 Parking sq. ft, 100,000 300 50,000 150 45,000 135 30,000 90

16. Office Rest-House &

Library Building sq. ft. 15,000 900 8,3Q0 500 5,000 300 3,400 200

17. Cattle Shed, Water Tr,ught& Vety, Dispensary sq. ft. 9,000 270 4,500 135 1,800 54 1,800 54

18. Co-op Canteens sq. ft. 2,000 120 _,500 90 _,000 60 1,000 60

sub-Total 23,350 11,521 6,493

Land Cost I/ acres 3.0U0 50 1,000 35 350 25 250

Total Capital Cost 26,350 12,521 6,843 3.456

Cost US$ Million equivalent (3.06) (1.45) (0.80) (0.40)

INDIA

HARYANA IRRIGATION PROJECT

Summary of Costs(Rs million)

Basic ComponentCost Design Pro- ect -Project Cost Cost as a Foreign

Before and Physical Base Price 1/ (01$ Million) C of Total ExchanreItem Additions Supervision Subtotal Contingency Cost Contingency Total Local Foreign Total Local Fore Proect Cost L/Modernization of Canals 431.0 47.3 (11.0) 478.3 24.0 (5.0) 502.3 83.7 586.0 510.0 76.0 68.1 59.2 8.9 30.6 13

Rural Water Supply 71.2 5.0 (7.0) 76.2 11.4 (15.0) 87.6 13.0 100,6 83.6 15.0 11.7 10.0 1.7 5.3 15

Rural Roads 146.5 14.7 (10,O) 161.2 16.1 (10.0) 177.3 31.3 208.6 177.3 31.3 24.2 20.6 3.6 10.9 15

Modernization ofWatercourses 411.4 51.6 (12.5) 463.0 37.0 (8.0) 500.0 83.6 583.6 525.2 38.4 67.9 61.1 6.8 30.5 10

Augmentation Tubewells

Well Point & LinkChannels 78.6 6.3 (8.0) 84.9 8.4 (10.0) 93.3 14.5 107.8 86.2 21.6 12.5 10.0 2.5 5.6 20Electrification 29.7 3.2 (10.5) 32.9 1.6 (5.0) 34.5 5.4 39.9 27.9 12.0 4.7 3.3 1.4 2.1 30

Markets 174.2 15.7 (9.0) 189.9 11.6 (5.0) 201.5 32.8 234.3 199.2 35.1 27.2 23.1 4.1 12.5 15

Jui Command

Construction ofWatercourses 24.7 3.1 (12.5) 27.8 2.2 (8.0) 2/ 30.0 3.2 33.2 29.9 3.3 3.9 3.5 0.4 1.8 10Land Levelling 8.0 1.0 (12.5) 9.0 1.0 (10.0) 10.0 1.6 11.6 9.3 2.3 1.4 1.1 0.3 0.6 20

Technical Assistance andApplied Research andDevelopment 3.0 - - 3.0 - - 3.0 0.5 3.5 3.5 - 0.4 0.4 - 0.1 -

TOTAL 1,377.5 147.9 (10.6)3/ 1,525.4 113.3 (7.5)3/ 1,639.5 269.6 1,909.1 1,654.1 255.0 222.0 192.3 29.7 100.0

I/ Expected price increases have been based on the following assumed annual escalation rates (in 7):

Calendar Year 1977 1978 1979 1980/83Civil Works 4.0 8.0 7.5 7.0Equipment 4.0 7.0 6.5 6.0

Assuming that costs are 75% civil works and 257. equipment, that expenditure is uniform through any year. Price contingency becomes:

1977/78 1978/79 1979/80 1980/813.8 11.6 19.5 27.6

2/ A physical contingency for experimental watercourses of 20% has been added to the normal physical contingency of 8%.

3/ Weighted average for project.

INDIA

HARYANA IRRIGATION PROJECT

Estimated Financing Plan(USS Million) 1/

GOHTotal and Participation Ultimate

Project Component Cost 2/ GOI ARDC Commercial Banks Borrowers

Modernization of Watercourses 67.9 37.3 19.7 10.9

Augmentation Tubewells 12.5 6.9 3.6 2.0

Tubewells Electrification 4.7 1.9 1.5 0.8 0.5 3!

Markets 27.2 9.5 7.9 4.4 5.4 4/

Jui Command Area(a) Lining of Watercourses 3.9 2.2 1.1 0.6(b) On-farm Development 1.4 0.6 0.5 0.2 0.1 5/

Modernization of Canals 68.1 68.1

Village Water Supply 11.7 11.7

Village Roads 24.2 24.2

Technical Assistance and AppliedResearch and Development 0.4 0.4

TOTAL 222.0 162.8 6/ 34.3 18.9 6.0

1/ Sums rounded to US$0.1 Million.2/ Including physical and price contingencies.3/ Haryana State Electricity Board.4/ Haryana State Agricultural Marketing Board.5/ Individual farmers.6/ Of which IDA contribution is US$111.0 million.

INDIA

HARYANA IRRIGATION PROJECT

Estimated Schedule of Expenditure(US$ Million)

…------…Fiscal Year---------78/79 79/80 80/81 81/82 Total

PART A. Schemes to be financed through GOH Budget

(a) Modernization of Canals 11.90 13.95 16.28 16.28 58.41(b) Rural Water Supply 3.02 2.43 2.43 2.30 10.18(c) Village Roads 3.49 4.65 5.81 6.66 20.61

Sub-total 18.41 21.03 24.52 25.24 89.20

PART B. Schemes to be financed throughInstitutional Credit

(d) Modernization of Watercourses 11.63 13.95 16.28 16.28 58.14(e) Augmentation Tubewells

Tubewells and link channels 2.77 2.74 2.67 2.67 10.85Electrification 1.00 1.00 1.00 1.01 4.01

(f) Markets 5.56 5.49 5.64 6.74 23.43(g) Jui Command

Construction of Watercourses 1.42 1.03 1.03 3.48Land leveling 0.29 0.29 0.29 0.29 1.16

Sub-total 22.67 24.50 26.91 26.99 101.07

PART C. Technical Assistance and AppliedResearch and Development 0.09 0.09 0.08 0.08 0.34

Net Project Cost 41.17 45.62 51.51 52.31 190.61

Price Contingency 1.57 5.32 10.11 14.39 31.39

Total Project Cost 42.74 50.94 61.62 66.70 222.00

55 TABLE 3.6

INDIA

EARYANA IRRIGATION PROJECT

Proposed Allocation of the Credit

Proposed Allocation % of Expenditureof Credit to be Financed

(US$ Million)

1. Civil Works

(a) Modernization ofwatercourses, marketsATWs and Jui Command 55% of ARDC'scomponents 38.0 refinance

(b) Other civil works 62.0 70% of cost

2. Equipment 5.0

(a) Directly imported goods 100% of foreignexpenditures

(b) Locally manufactured goods 100% of ex-factorycost or 70%

3. Technical Assistance andApplied Research and Development 0.4 100% of cost

4. Unallocated 5.6

TOTAL 111.0

56 TABLE 3.7

INDIA

HARYANA IRRIGATION PROJECT

Estimated Schedule of Disbursements

Disbursements

IDA Fiscal Year and Semester Semester Cumulative(US$ '000 equivalent)

Fiscal Year 1979

First 1,000 1,000Second 7,000 8,000

Fiscal Year 1980

First 10,000 18,000Second 18,000 36,000

Fiscal Year 1981

First 14,500 50,500Second 19,000 69,500

Fiscal Year 1982

First 14,000 83,500Second 17,000 10005nn

Fiscal Year 1983

First 10,500 111,000

April 1978

57 Table 5.1

INDIA

HARYANA IRRIGATION PROJECT

Prices Used in Financial and Economic Analysis

(1977/78 Rupees)

Financial Prices Economic Prices1977-78 1987-88 1977-78 1987-88

Output Prices (Rs/q)

Paddy 97 107 113 155Wheat 122 134 111 160Gram 190 209 182 260Bajra 128 141 123 175Barley 128 141 123 175Waize 121 133 116 165Fodder 8 9 8 9Rapeseed 316 348 341 456Sugarcane 13 14 7 15Cotton (American) 330 350 492 490Cotton (Other) 266 280 394 402

Labor (Rs/day)

Human Labor 8.5 8.5 5.6 5.6Bullock Labor 16,0 16.0 12.8 12.8

Agrochemicals (Rs/ton)

Nitrogen (N) 3,800 5,000 3,570 4,711Phosphatea (P) 4,200 4,300 2,860 4,020Potash (IC) 1,300 1,700 1,330 1,555

Conversion Factors

Standard Conversion Factor 0.80 0.80Foodgraiia Conversion Factor 0.96 1.24Oilseeds Conversion Factor 1.08 1.31Human Labor Conversion Factor 0.66 0.66

58

Table 5.2a

INDIA

HARYANA IRRIGATION PROJECT

Kharff Crop Budgets

G19q7-l988)

--- Paddy- - -- Jawar (Fodder) -HYV Bajra-- -Other Bajra --- Maize- --- American otherHYV Other R I R I R I R I Cotton Cotton

Quantities per ha.

Human Labor (days) 100 82 32 40 50 60 40 45 55 60 102 77

Bullock Labor (days) 12 12 12 12 6 9 5 8 8 9 18 13

Seeds (kg) 25 20 50 50 4 4 4 4 20 20 20 16

Fertilizers (kg) 110 40 10 20 20 60 8 15 10 30 50 20

N (kg) 85 30 10 20 15 40 8 15 10 25 50 20

P (kg) 25 10 - - 5 20 - - - 5 - -

K (kg) - - - - - - - - - - -

Yield (Main Product) (q/ha) 35 28 205 325 10 14 6 8 9 12 16 8

Financial Budgets (1977-78 Rs/ha)

Human Labor 850 697 272 340 425 510 340 383 468 510 571 431

Bullock Labor 192 192 192 192 96 144 80 128 128 144 230 166

Seeds 50 40 100 100 16 16 16 16 30 30 50 38

Fertilizers 533 193 50 100 97 286 40 75 50 147 250 100

Insecticides 20 - - - _ - _ - - - 300 100

Cultivation Costs 1,645 1,122 614 732 634 956 476 602 676 831 1,402 836

Gross Return (Main) 3,745 2,996 1,845 2,925 1,410 1,974 846 1,128 1,197 1,596 5,600 2,240

Gross Return (By-Product) 60 50 - - 250 300 150 200 53 70 50 40

Crop Return 2,161 1,924 1,231 2,193 1,027 1,318 520 727 575 836 4,248 1,444

Economic Budgets (1977-78 Rs/ha)

Human Labor 560 459 179 224 280 336 224 252 308 336 571 431

Bullock Labor 154 154 154 154 77 115 64 102 102 115 230 166

Seeds 50 40 100 100 16 16 16 16 30 30 50 38

Fertilizers 501 182 47 94 91 269 38 71 47 138 236 94

Insecticides 20 - - - _ - - _ - - 300 100

Cultivation Costs 1,285 834 480 572 464 736 342 441 488 619 1,387 830

Gross Return (Main) 5,425 4,340 1,865 2,925 1,750 2,450 1,050 1,400 1,485 1,980 7,840 3,216

Gross Return (By-product) 48 40 - - 200 260 120 160 42 56 40 32

Crop Return 4,188 3,546 1,365 2,353 1,486 1,954 828 1,119 1,039 1,417 6,493 2,418

R = Rainfed

I Irrigated

59

Table 5.2b

INDIA

HARYANA IRRIGATION PROJECT

Rabi Crop Budgets

(1987-1988)

Mexican Wheat Other Wheat -- Gram-- -Mustard-- -- Barley--- Sugar

R I R I R I R I R I Cane

Quantities per ha.

Human Labor (days) 85 100 85 100 32 40 50 60 55 76 180

Bullock Labor (days) 20 20 20 20 8 10 10 10 16 16 32

Seeds (kg) 100 100 100 100 50 50 4 4 90 90 70

Fertilizers (kg) 50 80 30 50 - 20 - 30 5 20 100

N (kg) 30 60 20 30 - - - 30 5 20 70

P (kg) 20 60 20 30 - 20 - - - - 30

K (kg) - - - - - - - - - - -

Yield (Main Product) (q/ha) 15 25 10 20 6 10 4.5 10 12 20 500

Financial Budgets (1977-1978 Rs/ha)

Human Labor 476 560 476 560 179 224 280 336 308 426 1,530

Bullock Labor 256 256 256 102 102 128 128 128 205 205 512

Seeds 150 150 150 150 100 100 12 12 99 99 1,001

Fertilizers 236 386 143 236 - 86 - 150 25 100 479

Insecticides 10 10 - - - 20 - 30 - 40 50

Cultivation Costs 1,128 1,362 1,025 1,048 382 558 420 656 637 869 3,572

Gross Return (Main) 2,010 3,350 1,340 2,680 1,254 2,090 1,566 3,480 1,692 2,820 6,950

Gross Return (By-Product) 240 300 200 240 48 80 - - 120 200 -

Crop Return 1,122 2,288 515 1,872 920 1,612 1,146 2,824 1,175 2,151 3,378

Economic Budgets (1977-1978 Rs/ha)

Human Labor 476 560 476 560 179 224 280 336 308 426 1,008

Bullock Labor 256 256 256 102 102 128 128 128 205 205 410

Seeds 150 150 150 150 100 100 12 12 99 99 1,001

Fertilizers 222 363 134 222 - 80 - 141 24 94 450

Insecticides 10 10 - - - 20 - 30 - 40 50

Cultivation Costs 1,114 1,339 1,016 1,034 382 552 420 647 635 864 2,919

Gross Return (Main) 2,400 4,000 1,600 3,200 1,560 2,600 2,052 4,560 2,100 3,500 7,400

Gross Return (By-Product) 192 240 160 192 38 64 - - 96 160 -

Crop Return 1,478 2,901 744 2,358 1,216 2,112 1,632 3,913 1,561 2,796 4,481

R = Rainfed

I = Irrigated

60

TABLE 5.3

INDIA

EARYANA IRRIGATION PROJECT

Total Costs, Recoveries and Cost Recovery Rates(Present Values at 12% Discount Rate; Rs. million)

Modernization Augmentation Modernizationof Canals Tubewells of Watercourses Total

COSTS

Capital Costs 421 144 418 983

Present Value ofRunning Costs 1/ 131 70 201

Total Costs 421 275 488 1,184

RECOVERY

A. Present Value ofGOH Recoveries 112 73 63 248

Recovery Rate 27% 27% 13% 21%

B. Credit Recovery n/a n/a 415 415

Recovery Rate - - 100% 100%

C. Overall Recovery 112 73 488 673

Overall Recovery 27% 27% 100% 57%Rate

1/ Incremental 0 & M Costs Only.

TABLE 5.4

61

INDIA

HARYANA IRRIGATION PROJECT

Direct and Indirect Cost Recovery at Full Development

(1977/78 Rs per ha) -/

Bhakra Canal West Yamuna Canal

Kharif Rabi Kharif Rabi

Direct Recovery

Land Revenue 2/ 3,5 3.5 3,5 3.5

Water Rate 3/ 63.0 63.0 56.0 56.0

Total 66.5 66.5 59.5 59.5

Indirect Recovery

Paddy 4:/ 13.5 24.5

Wheat 4/ - 46.2 _ 51.9

Sugarcane 5/ 2.6 2.6 11.4 11.4

Cotton / 55.7 - 6.0 -

Total. 71.8 48.8 41.9 63.3

Total Recovery 138.3 115.3 101.4 122.8

Direct Recovery 48% 58% 59% 48%(as % of total)

1/ Direct recoveries are assumed constant in real terms at present levels.

2/ Incremental land revenue at 7 Rs/including cesses.

3/ Source: Irrigation Department data averaged out for both crop seasonsbased on 1975 revision of water rates (about 100% above previousrates).

4/ Assuming 90% of incremental production is subject to a marketing fee of 3%ad valorem on arrivals.

5/ Assuming 50% of incremental produce in the form of gur will be subject tothe market fee.

6/ Assuming all incremental produce is sold through regulated markets.

62

TABLE 5.5

INDIA

3ARYARA IRRIGATION PROJECT

Average Repayments and Farmp. Incomes (Jind District)(Current Rs. per ha)

---- FARM INCOMES ---------- ---------------------------- REPAYMENTS -----------------------------

As ' of As % ofPrice 1/ Average Incremental Installments 2/ Average Farm Income Incremental Farm Income

Year Index After Lining Due to Lining Equal Graduated Equal Graduated Equal Graduated

1978/79 104 899 67 3/ 3/108 998 134 - -

1979/80 112 991 73 55 4/ 55 4/ 6 6 75 75117 1,115 158 55 7/ 55 4/ 5 5 35 35

1980/81 122 1,094 82 104 78 10 7 127 95127 1,243 185 104 78 8 6 56 42

1981/82 132 1,205 90 104 78 9 6 116 87137 1,385 215 104 78 8 6 48 36

1982/83 142 1,329 98 104 78 8 6 106 80148 1,540 280 104 78 7 5 42 31

1983/84 P54 1,466 109 104 98 7 7 95 90160 1,713 288 104 98 6 6 36 34

1984/85 167 1,613 120 104 98 6 6 87 82173 1,903 330 104 98 5 5 32 30

1985/86 180 1,777 133 104 98 6 5 78 74187 2,111 378 104 98 5 5 28 26

1986/87 195 1,958 146 104 117 5 6 71 80203 2,353 432 104 117 4 5 24 27

1987/88 211 2,156 162 104 117 5 5 64 72219 2,602 491 104 117 4 4 21 24

1988/89 228 2,371 178 104 117 4 5 58 66237 2,884 557 104 117 4 4 19 21

1/ Assuming 4% inflation per season.

2/ See para 6.10 for details of equal or graduated repayment terms.

3/ Cost of works assumed to be 1,075 Rs. per ha CCA.

4/ Repayment of interest only.

63 Table 6.1

INDIA

HARYANA IRRIGATION PROJECT

Economic Unit Capital Costs

Unskilled Otbtes. Local ForeignLabor 1 _ Costs 2/_ Exchange Total

Lining of Canals (1977/78 Rs per 100 square feet)

Labor 60.00 21.40 - 81.40Materials - 88.60 21.30 109.90Transport - 4.80 4.80 9.60

Financial Cost 60.00 114.80 26.10 200.90Economic Cost 36.00 91.80 26.10 153.90

Augmentation Tubewells ('000 of 1977/78 Rs per tubewell)

Labor 49.10 19.90 - 69.00Materials - 65.90 22.00 87.90Electrical Equipment - 2.20 3.30 5.50Other Equipment - 20.20 16.40 36.60Land,Acquisition - 9.50 - 9.50Electrification 8.30 28.80 15.90 53.00

Financial Cost 57.40 146.50 57.60 261.50Economic Cost 34.40 117.20 57.60 209.20

Lining of Watercourses (1977/78 Rs per foot-run)

Labor 5.59 - - 5.59Materials - 5.90 0.12 6.02Transport and Overheads - 2.89 1.48 4.37

Financial Cost 5.59 8.79 1.60 15.98Economic Cost 3.35 7.03 1.60 11.98

1/ Conversion Factor = 0.60

2/ Conversion Factor = 0.80

INDIAHARYANA IRRIGATION PROJECT

IMPLEMENTATION SCHEDULE

r TOTAL CWORK WNORK TO BE 1977 1978 1979 1980 1981 1982ITEM UNIT S~~~~TOTAL COMPLETED COMPLETED __ITEM UNIT ST~~~~~~~POGATE BEFORE THROUGHITE UIT PRSOTGARTAM DEC.1977 PROJECT V 03 Q4 Q1 Q2 Q3 04 Q1 Q2 Q3 Q4 Ql 02 103 04 01 Q2 0 Q3 104 Q1 02 03 Q4

START QUAN-/// /K(a) MODERNIZATION OF CANALSJ/ Km -// _ _ _ //_

li) Bhakra Canal Command 4401 1972/73 270 Approx. 2025 4 = 989 ?02!V(ii) WYCCommand 2981 725- - 4 - - - - - -liii) gargaon Canal 432 / / 7/ / /

Ic) UMETTONTBEEL W1780man9371 1349 960/ 0/. 6 /_ _24 / 2

Ib) MODERNIZATION OF WATERCOURSES!/ No of _ _ 550 /7 8 7 1 /lil Bhakra Command Waetercourses 3563 1971172 868 1123 _ __7// __ 112 3lii!) Agra/Gurgaon Canal 438 // _ / / /

Area / | | / l // 777/ 7le) MARKETS No.Aof Units 125 19 20 26 8 - - 10 • - 2 ' - 3

lii 'B' Type Markets 5/ T _ _ _ I .. I ; ,liii) 'C' Type Markets 1 5 I IA ' I /1/ liv) 'D' Type Markets 1 ._=_ I'T Iv) Improving-Existing-Markets 31 4 7/

I) R ILrGOAOnS Km 15,520 Km 1 970 8650 377 77

lii) New Roads |945 . =/._ 542 / / | 945|v

. 1 _ _ . _ I , _ I7 r - I , I k X~~~~~~~~~~~~~~~~7 900

JExcluding the Lift Irrigation Areas 1/ World Bank -186072JProgress through the project period is showvn M// MONSOON SEASON

as cumulative totals on lst April each year

JArea cored for on-farm developmentis 40% of total CCA

65

CHLART C-2

iNDIAHARYANA IRRIGATION PROJECT

ORGANIZATION CHART OF GOVT. OF HARYANA(RELEVANT DEPARTMENTS)

CHIEF

MINISTER

MINISTER FOR - MINISTER MINISTER FOR

IRIGATION. POWER IFOR FINANCE& P. W 0. | AGRICULTURE

CHIEF

I~~~~~ _ _ _* * * *' * * * * * * s-|-|-|-| '| SECRETARY p"~|~" W

SECRETARRY SECRETARY SECRETARYP. W. 0. I31AONAGRICULTURE FINANCE

CHIEF ENGINEER HA RYANA CHIEF ENGINEER CHIEF ENGINEER DIRECTORB & R STATE ELECTRICIT IRRIGATION PUBLIC HEALTH AGRICULTURE

HARYANA STATE COMMAND AREA ROUGHT PRONE SMALL FARMERS AGRICULTURALMINOR IRRIGATION DEVELOPMENT AREA PROGRAM DEVELOPMENT MARKETING

TUBEWEL_ CORPORATION AGENCIES AGENCIES AGENCIES BOARD

References

Flow of E.ec.:Ne & Admnostrat,e Authority PWD Public Works Deparrment

B&R Bridges & Roads* I 1 I m Adm,,istratiwe Control of Secretaries World Bank-18488

66 CHART C-3

INDIAHARYANA IRRIGATION PROJECT

PROPOSED ORGANIZATION CHART: HARYANA STATE MINOR IRRIGATION (TUBEWELLS) CORPORTATION

1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -

-I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~N

... ..... r -----ubewDw r-- 1-L ' i rrmr;:

I"T.Wq I Pump Manufasol A.- -,ss A.o--- T _ I L A,A M:AS

L| AS j Aw .S. I_.i.

INDIAHARYANA IPRRIGATION PROJECT

ORGANIZATIONAL CHAFsT -HARYANA STATE AGRICULTURAL MARKETING BOARD

CiAifMAN

MANAGtfiG DIRECTORSECRETARY

ENFORTMAHrOET r ADMNISTRATION tAND AC D IT ( T DE SISN

ACCOUNTS IFonarcsal A fwi SChlef O~Ntfc I SCteiBf Ofeficer) chef

AMOAON OJVIEJON ~MARKETING PROJECT/SINKANA I~O ~ RICO CONSULTANTS

Is EO I M- /I - - I IDESI I E

w . ; . . . . _ lf 5s2eiisthelowl [~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~elw

ME OFFICE I ME OICE V ME OFFICE IX DESiGN-GUGAON ANI -AMEALA SECTION

ME) EOi tMEOI Architel

ME OEE CEll ME OFFICE VI ME OFfiCE X SECIOMi -NOI-IROfAR"- - HISSAR -_ARNAL

OiMEOI IMOI

ME OFICE Rl ME OFFCE VU ME OFFICE Xl MuNfTIIC G

_ - R EH-AK - SIRSA KLIRULKS.I,ET.9A AND RESEARCH

fMlEOI tMEOI IMEOi (,

MV OIFice iV U! Me OFFICE Vi\/-SONEPAT - lIND

| MEI tMEOI POJFt PROJEcT MARKET

CO -ORDINNA7 ON j | IONITORINti i RESFARCR

EWEo Se.er Mlrket,rpg Enforce-nen Officer Pon Tirr, A&rirw, & CUn eMEO MerinE Erf-rtenrert Officer

SE Su.pr,en-rg Eirrc- Lerl) AdoNoc

See Se-c Fecr Erenejer- Mwifre OfficerXcN Eexecutv E,,geerr Proecr t E.erry AJWe-oc

Arch:eOWuraW CeetulranlToEw, Pkeniog C,ns,usta,tMrketi ng Adlaor Worrld 8ak- 18606Techeicel Ass,. (P)bilc teeIthl

68ANNEX 1

Page 1

INDIA

HARYANA IRRIGATION PROJECT

Related Documents Available in the Project File

A. Selected Working Papers

1. Draft Report of the Haryana Irrigation and CAD Project(2 Volumes), FAO/World Bank CP, July 1977.

2. Working Paper on Agricultural Credit, FAO/World Bank CP,July 1977.

3. Notes on Watercourses and Land Shaping in Dune Sand Areas,and Land Development for Irrigation in Pump-Lift Area, FAO/World Bank CP, February 1977.

4. Lining of Existing Channels of Bhakra and West Yamuna CanalSystems, Haryana Irrigation Department, April 1977.

5. Project Estimates for Lining of 6,423 Watercourses in GravityAreas, HSMITC, January 1977.

6. Project Estimate for Installation of 750 Tubewells; HSMITC,January 1977.

7. Project Report for Electrification of 750 Deep Tubewells inHaryana, Haryana State Electricity Board, January 1977.

8. Integrated Agricultural Marketing and Rural Development Project,HSAMB, July 1977.

9. Master Plan Report for Rural Water Supply Scheme of HaryanaState, Public Health Department, PWD, 1976.

10. World Bank Assistance. Construction of Rural Roads in the Stateof Haryana excluding the Area Covered by the Lift IrrigationScheme. Bridges and Roads Department, PWD, 1976.

B. Laws

1. Northern India Canal and Drainage Act, 1873.

2. Haryana Canal and Drainage Act (1974) with Amended Rules (1976).

3. The Punjab Agricultural Produce Markets Act, 1961.

69

ANNEX 1Page 2

C. Reports and Studies Relating to the Project

1. Haryana Statistical Abstracts, 1975/76.

2. Census of Agricultural Holdings in Haryana State, 1970/71;Department of Agriculture, March 1975.

3. An, Agricultural Geography of Haryana, Jasbir Singh, ViscalPublications, 1976.

4. Changing Structures of Agriculture in Haryana, GOH, 1969/70.

5. Soil Survey of Jui Canal Command, Hissar Agricultural University,April 1973.

6. Hatryana's Efforts to Irrigate its High Areas, Part IV, JLNProject, Haryana Irrigation Department, December 1976.

7. Optimum Length Required to be Lined in a Watercourse, S.P.Malhotra, July 1974.

70

ANNEX 2Page 1

INDIA

HARYANA IRRIGATION PROJECT

Project Lending Terms and Conditions

The following lending terms and conditions would be used to imple-ment the project and would not be changed without prior agreement with IDA:

1. IDA to GOI

Normal IDA terms and conditions.

2. GOI to GOH

GOI to finance modernization of canals, rural water supply schemesand village roads in accordance with the GOI's established policyfor development assistance to GOH.

3. GOI to ARDC

(a) In respect of ARDC refinancing up to 9 years:

(i) annual interest rate of 6.75% minimum; less 0.25%for prompt repayment;

(ii) repayment at the end of 9 years; and

(iii) GOI to carry exchange risk.

(b) For ARDC refinancing for more than 9 and up to 15 years:

(i) annual interest rate of 7.25% minimum; less 0.25%for prompt repayment;

(ii) repayment at the end of 15 years;

(iii) GOI to carry exchange risk.

4. ARDC to Lending Banks

(i) Annual interest rate of 7.5% minimum for modernization ofwatercourses, augmentation tubewells, transmissionand land levelling components;

71ANNEX 2Page 2

(ii) annual interest rate of 8% minimum for market constructionlending;

(iii) installment repayments based on repayment schedule to

coincide approximately with agreed collection datesfrom the ultimate borrowers; and

(iv) refinancing by purchase of debentures or by loans up

to 80% of loans to HMITC, HSAMB and 90% of loans toHSEB and to individual farmers, 90% of loans for minor

irrigation and 75% of loans Zor lcLd llX,.

5. Lending Banks to Ultimate Borrowers

(a) To Haryana State Minor Irrigation and Tubewells Corporation (HMITC)

(i) Annual interest rate of 10.5% minimum;

(ii) loan ceiling of 80% of the cost of augmentation tube-

wells including associated civil works and pumpsets;

(iii) HMITC's contribution shall not be less than 20% of

the cost of modernization of watercourses inclusiveof overheads and establishment cost on norms satis-factory to ARDC;

(iv) repayment periods in respect of loans for moderniza-tion of watercourses to be based on ultimate farmerbeneficiaries' repayment capacity but not to exceed10 years, inclusive of a grace period of one year;HSMITC shall pay interest in the first year;

(v) repayment periods in respect of loans for construc-tion of augmentation tubewells to be based on thecash flows of HSMITC and the life of tubewells to be

constructed but not to exceed 12 years inclusive ofa grace period of one year; HSMITC shall pay interestin the first year;

(vi) security would be in accordance with the arrangementsbetween lending banks and ARDC which would include GOH

guarantee to the participating banks for payment ofinterest and repayment of principal;

(vii.) HSMITC shall use the design methodology set forth inthe design manual to decide the length of watercourses

to be lined; review of the design manual by IDA andARDC would be a condition of distribution for themodernization of watercourses component (para 3.17).

72ANNEX 2Page 3

(viii) HSMITC shall have capital and staff considered adequateby ARDC to function effectively, to operate servicesand to ensure proper financial accounting and manage-ment;

(ix) HSMITC shall institute monitoring, evaluation and

reporting procedures acceptable to ARDC and IDA;

(x) HSMITC shall undertake maintenance of watercourses

after lining with cost recovered from the benefi-ciaries during the currency of the project loan;

(xi) capacitors should be provided in tubewell installa-tions to effectively protect motors from damage dueto voltage fluctuations;

(xii) Hour meters should be installed on tubewells to monitorperformance and enable the efficiency of the installa-tions to be estimated;

(xiiii) HSMITC shall use materials satisfactory to ARDC for liningof watercourses and changes to specifications should onlybe made after prior approval by ARDC; and

(xiv) if the statutory audited accounts of HSMITC cannot be fur-nished within four months of close of the accountingyear, HSMITC should engage the services of CharteredAccountants acceptable to ARDC for audit of its accounts;

pending statutory audit, the audited accounts by theapproved Chartered Accounts shall be furnished to theparticipating banks and ARDC within four months of theclose of the year.

(b) To Haryana State Electricity Board

(i) Annual interest rate of 10.5% minimum;

(ii) repayment period not to exceed 7 years; and

(iii) security would be in accordance with the arrangementswith the lending banks and ARDC which would include GOHguarantee for payment of interest and repayment ofprincipal.

(c) To Haryana State Agricultural Marketing Board (HSAMB)

(i) Annual interest rate of 11% minimum;

(ii) a loan ceiling of 80% of the total investment costother than land;

73

ANNEX 2Page 4

(iii) repayment periods should be based on the cash flows ofthe HSAMB but not to exceed 12 years including a graceI)eriod up to 2 years at the discretion of ARDC;

(iv) security would be in accordance with the arrangementswith the lending banks and ARDC which would includeGOH guarantee for payment of interest and repaymentof principal;

(v) HSAMB to expand staff including a Chartered Accountantso that staffing is considered adequate by ARDC toexecute the project and operate the facilities;

(vi) HSAMB shall use its funds as defined in para 4.12until project loans have been repaid for the fol-lowing purposes in the order of priority: servicingof the project loans; that is obligations to thelending banks under the project; operation andestablishment expenses; and expansion of marketingfacilities. Only after the above obligations aremet, funds of HSAMB may be used for any other purposesspecified under Section 26 of the Punjab AgriculturalProduce Market Act, 1961 (as applicable in Haryana).

(vii) HSAMB to introduce commercial system of accounting andget its accounts audited by a Chartered Accountantacceptable to ARDC and furnish audited statements ofaccounts within four months of the close of theaccounting year.

(d) To Individual Farmers for Land Levelling in Jui Command AreaOrdinary Land Development Loans

(i) Annual interest rate of 10.5% minimum;

(ii) a once and for all evaluation fee of 0.5% of the costof investment may be charged;

(iii) farmers' contributions to include obligatory purchaseof LDB shares, own labor and other contributions incash or kind and for lending to small farmers, a minimumof 5% for the cost of development; for farmers cultivat-ing lands providing a pre-development net return tofamily resources between Rs 2,001 and Rs 3,500 basedon 1972 prices, a minimum of 10% of the investment cost;and for all other farmers, 15% of the investment.

(iv) Item d(iii) is conditional in that no cash contributionneed be collected from the farmers if any of the on-farmdevelopments are executed through the Land Development

74ANNEX 2Page 5

Corporation or any other centralized agency, and/or nocash is paid to the individual farmers to carry out thework and the amount of loan is paid directly to theagency executing the work by the lending banks on behalfof the farmers.

(v) repayment periods should be based on the ultimateborrowers' repayment capacity but not to exceed10 years for normal lending and 15 years for lend-ing to small farmers;

(vi) grace period not exceeding 2 years from the date ofdisbursement of the loans, may be granted at thediscretion of ARDC provided that the repaymentperiod of such loans is not exceeded;

(vii) security would be as determined by the Lending Banksand ARDC; and

(viii) if there are any ineligible farmers for bank loansthat require financial assistance for carrying on landlevelling operations, their requirements may be met fromthe Command Area Special Loan Account (SLA) set up withthe ARDC on terms and conditions which are to be agreedbetween GOI, GOH and ARDC. The terms for Special LandDevelopment Loans shall not be more favorable than thatfor ordinary Land Development Loans.

6. General ARDC Conditions

(i) ARDC and lending banks would maintain separate accountsfor each of the above categories of project lending;

(ii) ARDC and lending banks would maintain separate recordsfor small farmers;

(iii) HSMITC and HSAMB shall maintain accounts satisfactory toARDC;

(iv) ARDC would apply the agreed criteria relating to percent-age overdues to HLDB debentures eligibility;

(v) ARDC would apply the overdues criteria relating to LDBdebenture eligibility, while refinancing HSCB, CentralCooperative Banks and their branches if they participatein the project lending;

75ANNEX 2Page 6

(vi) ARDC shall ensure appraisal of the proposals of HSAMBfor development of each of the market yards as regardstechnical and financial aspects. The appraisal shallcover among others, the following essential aspects:location of the marketyard and suitability of thesite and scope for further expansion; details of pro-posed development and justification for each of thecomponents; adequacy of the facilities proposed foranticipated market arrivals over a minimum 10 years;technical suitability of the proposed developmentwith respect to layout, design, services includingdrainage, water and sewage system, constructionstandards and costs; and schedule of implementationand cost of each phase of the scheme.

,(i<u.5

,APoirors=t Llne of Covirul

,.J S 2 <?CHINA

Iz -S ? > qHUIAN o INDIAH wAPYAIVA's>'^ o4;-'-< ,> HARYANA IRRIGATION AND CAD PROJECT

1I INDIA BURM

\lay ?> B l o 30 60 90 120 150

3r of ) 0-trIZcrZ $ KILOAAETERS

.ANKA Bounduries Areas Suitable for Shollowand Deep Tubewell Development <

m :S ,"..S ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~7 .... ..

[1.- -Sands aznd Loamny Sands ___-___. : Areas underlain byalluvium ;jjXa

* >/ /// : : :: :::t feoubleowntsdepbof )'- ..................... S ^,-, :'_1-\t.X... . . . . . . . . . . . . . . . . .l!^ -

t///Sandy Looms 9***/// ;4 o6 eesk> /BU x,- lll-l1

Slopey Sls and Silty Claoys _ 1 * Area uneli by aluir wh.ere

District Boundaries '?o r i. .5 Area where Orluate tubawells W ,

- State Boundaries // t are vol feasible due lv qualiry :|1.j.

9 ~~~~~~~~~~~~problems in shallow aquifers b

____District Boundariesrnonravn,surenrmparuasrroe wOriddsarrs siaO .cius,vnyrorthroneumrrs esr Slate Boundaries aoridsr.eaose o rveres spono h stu is arroched rn. dunurn,,r.r,u,srurvr dnreboundaries drown orns rnsmp dOr notrpir on rhe pMrrrrIhedWorldd arkr,i 0d An,t.lsrl0&5frC

eta rudWtrBor ohWsenR

orrirrn enriyuddmnoar Orlma rsimnsiSrr or air iniror. ri ndursamenr or noore: Annnurr/Gograp/ry of HarYana; JausbirSivgh; 1976 Souce GOta rudWrr6ad,ioryWsen,ein

. . . . . . . . . . . .

g(~ >,Abhro55mttOt I.,e of Costrol

[ ~~~~~~~~~~~~~~~~INDIAe / .4 ?~~~ 3HUTAN,@

RYAVwA _sv1- HARYANA IRRIGATION AND CAD PROJECT.* I ND I A ( BURMA

0 30 60 90 120 150., \ ,/t ayt t. -2aJ f,.qg N5KILOMETERS -

1100 . .'ci ~~~~~~~~~~~~1000

____________\_______V__ 900: Annual Rainfall

Total Ann0al Rainfall F,, Coefficient of Variation1000

300 .4 / 510 0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~(

U~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

~~? • hOOt 5 0 0 ( 70

S < r Y \L ~~~~~~ 601) PERCENT

This m4ph. h.e Ltwr by tOe Wo4 Setks staff .setsstet tot Les ssaie, f LU-cLvrFdwds hpzm pk O s ot i'Nrmptt so thSe pt otto. We LdB sk t

.ii.t>.s5

jpotsttsteisots0 5.o, _n Source: An Agnsricurum/ Gea1othyof He.tyane; .I,esbrSinwh; 1976

45~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~C

IBRD 13483MARCH 1978

I N D I A

HARYANA IRRIGATION AND CAD PROJECT

Typical Lined Watercourse Command

_________ Distributary or minor canal... .Watercourse command or "Chak" boundaries

Lined watercourses…--…Unlined watercourses

Extension to lining of watercourseto satisfy project design criteria

. Farm outlets or nukkasWatercourse outlet (head structure)Roads

PRANCH A D

T =:~~T~.. ~~~~~~~~~~~~BvN: R.....

.........

IRA\CB BRAN D L

AFGHAN<. >zlApprox-te IiI,e of ntrol: , -r

ISTAN ...-- .=

,-_ r t ~CHINA. l \ = =

RAKISTANs n,i ./r' ,.

vIHaryBna T ..t? JN.8_UTAN ,

BANGLADESH, ,

0 I D| X U MA 0 250 500

METERS

Th., mop ha- been prepered by the 500 I00 1500World Bank's staff ooolos-eey for FEETthe convenlence of the readers ofthe report to mhikh it to atached

A eb \ fFo} ofBxrThe denomiations used end theboosdariasMb ohoto this map

Icrn t,rvt do not mply so the port of th CULTIVABLE COMMANDAREA(CCAIl 425 ACRES

Setr W ,@uord Bank -nd itsalited at it y DISCHARGE 1.00 CUSECSjudgment On the lagal otftu of

A RI LAKs teitoy e do,-mn TYPE OF LINING: CONCRETE BED & BRICK WALLSoaptaoce of sh b-ou ies. NUMBER OF HOLDINGS: 32

IBROI 3481

75' 71e 77* MARCH 1078

INDIA suriei R / /> \

HARYANA IRRIGATION AND CAD PROJECT / 'Modernization of Watercourses, Market Component, \4 Kalko

and Jui Lift Irrigation Command ,\U Princ,pol Market Yords <,* Sub Market Yards , ChondcgarS

Haryana Stote Minor Irrigation(Tubemell) Corporation Dlvis,onal Boon ariesEZiiJ On-Farm Development Areo aJ

Moin Roods Roiparo

Dlvi I N GHAGGA~~~~~~~~~~~~~~~~~~~~Ri r

Norrow Gouge Roalways . .. .....oryOoS v Cities o n d Tow ns

Gravtr Canal ConnarCanal

-- -D,strict Boundaries }/, \ 9 S-tate Bo>undearies 9

NARWANA 320~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~5A

JIND ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~

Lir rrgaror rL

i, FF-t- s I 0 N ,

0 ~ ~ ~ ~ ~ ~ ~ ~

~~~~:\-?~~~~~~~~~~~n j N

-29' <5V \r 9

Modernization of Watercourses Q R \

G-,t Conol Co-.o. nofCdAN I \D O95N HA! Y A N A rHiSSAR - 3 20 ov:\5 s/*Ba6od.,g.r F DELHI

HARYANA 320 @ hr;ol¢)41 Jhoiioo l?i7 YNARWANA 3 20 D v 0 0 30 0 30 0 I S0N

DELHI 1653 Lohoru 9 <C <~ S V

2 083 = _ 0 rurg1*;'7 r

L.Ft Wrci,.ti A,..t Mh < / a ;

s 9 W >/r a;;mate L, e ol Conssol f_>~ ~~~~~~~~~~~ ~ ~~~~~~~Nor noul~7 °Nh

oS vr t ~<w 28- j ?o t (S \/X/} gCHI- 2G R G V N ;2

{ Af E . .+ .X. 9''>\ %u r_H,Ut; r _ 6 l~~~~~~~~~~~~~~~F irozpur Jh,,O'o 5X

<! INDIA lluR.A <\

m~~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~ 0 10 20 30 4p Er 6p 7

KILOMETERS

76 77'

IBRD 13482

75' 76' / 77- MARCH 1978

HARYANA IRRIGATION AND CAD PROJECTModernization of Canal System, Village Water Supply Schemes, \Kalka

ond Augmentation Tubewell Schemes* Village Water Supply Scheme (conol source) /$ K o .' -..* Village Water Supply Scheme (groundwoter source) / Chandigarhs S

LI Iii Augmentoaion Tubewell Scheme Areos= Canal Command Areas

Mo- n Roads |- Broad Gouge Roilwoys- Narrow Gouge Railways

o Cities and Towns' Canals ,

---- R,versDistrict BoundariesState Boundaries

Mandibobwal,0'

-29'

gR R } G A r f 0 >/8iwoni fs " 4:;29

~~~~~9~~ ~ F+oi OT J j t

~tAINCOMMANDjrh- t"fiR h- bwSr a/us'"h h.' OOr^Ast"Cv w ;> / fl o h r ^ 22 ,~~~~~~~DELHI

A. ,.eONwt ,C*CA ,,.I@UC h.d so- hrhdb hirf" < / t5

ANUn"t78$ht^y er. ,g,,.tiG of lh, - Nt D I R A GAND 9

0 10 20 -30 40 50 60 70 80

KILOMhETER!, g ZNVrlRRS/\

75' H 7 §. ITW

¢; &} '' ' ~~~~~CHI.A -28 i - j J AG R A s5UF 28 -

INDIA \ UMA/= 1 T,J

9 Ao.,t.ee r o u . Proposed ATW Schemes

_ \ 0 21 f f tF sA t ~~~~~~~~~~~~~~~~N-mb- f W.l1, N-rb-f olW.Il

Z 9 2 ]~~~~~~~~~~~~~~~. RATIA BRANCH CANALS 300 H, 34 5 4. HANSI BRANCH /BUTANA BRANCH CANALS 75

\ _t ~~~~~~~~~~~~~~2. RORI BRANCH CANALS 150 t. 19 0 5 SIRSA BRANCH CANALS 50

hx \ 3 ,r\ ~~~~~~~~~~~8.NARWANA BRANCH CANALS 75 TOTAL NUMBER OF AUGMENTATION TUBEWELLS 650

T97 13-SwWlo<